March 6, 2019 / 1:55 AM / 5 months ago

Hong Kong suspends stock connect purchases in Chinese firm

SHANGHAI, March 6 (Reuters) - Hong Kong’s stock exchange has suspended share purchases of Han’s Laser Technology made from overseas through the city’s stock connect with the Shenzhen bourse, after foreign ownership in the mainland firm neared the regulatory cap.

According to the Shenzhen Stock Exchange’s website, the proportion of Han’s Laser Technology shares held by overseas shareholders reached 28.38 percent on Tuesday.

Under Chinese rules, combined foreign ownership in a China-listed company must not exceed 30 percent, while the ownership cap for an individual overseas investor is 10 percent.

The Hong Kong Exchanges and Clearing Ltd (HKEX) said in a statement on its website on Tuesday that it would stop accepting orders to buy stock in Han’s Laser Technology, after it was notified by the Shenzhen Stock Exchange.

However, it said it would continue to take sell orders through the Shenzhen-Hong Kong stock connect.

Shares in the company, which makes equipment that uses laser cutting and engraving technology, have risen by close to 40 percent since the start of the year.

Han’s Laser Technology issued a statement on Tuesday saying that the company’s production and operations were currently normal and that it had no major information to disclose.

Hong Kong’s Stock Connect system, which links the two mainland exchanges in Shanghai and Shenzhen with Hong Kong, is the only means for international investors to trade mainland stocks directly. (Reporting by Brenda Goh and Samuel Shen; Editing by Sam Holmes)

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