UPDATE 2-China to allow cross-border Hong Kong, Shanghai stock investment
* Significant step towards China's capital market opening
* Investment limited to blue chips and dual-listed shares
* Programme to launch after six-month preparation period (Adds comment, background)
By Lu Jianxin and Gabriel Wildau
SHANGHAI, April 10 (Reuters) - China will allow cross-border stock investment between Shanghai and Hong Kong, regulators said on Thursday, a small step towards opening China's capital account and letting Chinese individuals buy foreign equities overseas.
The move represents a potential goldmine for brokerage services, and the news drove shares of securities firms sharply higher.
The China Securities Regulatory Commission (CSRC) said in a statement that the pilot scheme would allow mainland investors to trade shares in designated companies listed in Hong Kong, and at the same time let Hong Kong investors buy shares in Shanghai-listed firms.
"It's the first time individuals have been able to take money out of China to invest in equities, so that's a big breakthrough," said Stephen Green, head of research for Greater China at Standard Chartered in Hong Kong.
"The capital account is opening on both sides." Continuación...