London Stock Exchange (LSE) has signed a memorandum of understanding (MoU) with Agricultural Bank of China (ABC) to establish new RMB equity products for the London market.
The agreement was signed by Chris Gibson-Smith, LSEG chairman, and Jiang Chaoliang, chairman of ABC.
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As well as the development of a new RMB product, the MoU outlines several areas for closer collaboration, including facilitating access to capital by Chinese companies through London Stock Exchange’s Primary Markets operations and supporting investor education and awareness programmes in China and the UK.
Chris Gibson-Smith, Chairman, LSEG said:
"We are delighted to sign this important MoU with Agricultural Bank of China. China’s exceptional economic growth has fostered a deep and vibrant base of Chinese companies that have made great advances in accessing public capital markets both at home and overseas. We are fully committed to supporting the efforts of the Chinese and the UK Government in developing an off-shore RMB market in London through innovation and partnership with Agricultural Bank of China."
Jiang Chaoliang, Chairman, ABC said:
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By GlobalData"This important MoU with London Stock Exchange Group again manifests our bank’s commitment to the European market. We will be working closely with LSEG on facilitating Chinese corporates’ access to the UK and European capital markets as well as promoting the development of the offshore RMB market in London. We believe the ABC-LSEG partnership will not only strengthen the international competitiveness of the two organisations but also significantly enhance the strategic, economic and financial cooperation between the two countries."
LSEG has a strong track record of supporting Chinese equity and debt issuance on its markets. 59 Chinese companies are quoted in London – 7 on the Main Market and 52 on AIM. In addition, there are 19 so-called dim sum bonds on London Stock Exchange’s markets, with an aggregate value of RMB 14 billion. This year, IFC, part of the World Bank Group and Bank of China issued bonds of RMB 2 billions and RMB 2.5 billion respectively.
FTSE, part of LSEG, is a global leader for China based indices, with more than half of all non-China domiciled global ETF assets invested in China linked to FTSE products. Over 75 per cent of China A Share ETF AUM in Hong Kong are benchmarked to FTSE indices.
