A London Shanghai stock connect is set to go live by the end of the year, with HSBC Shanghai listing imminent, making it the first foreign firm to list.

Linking the London Stock Exchange with the Shanghai Stock Exchange has been discussed for more than a decade.

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Once live it will allow international investors to access shares in Chinese listed firms. It will also enable Chinese investors to purchase stocks quoted on the LSE.

HSBC will be the first international company to benefit from the stock connect according to a report in the FT.

A successful London Shanghai stock connect deal will help China integrate its financial markets internationally.

Chinese shares down by 30% YTD

Chinese shares have endured a difficult 2018 and are down by around 30% for the year to date.

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A London/Shanghai tie up would represent the first test of Chinese Depositary Receipts. CDRs are a type of share based on the structure of US depositary receipts.

HSBC has been linked with listing its shares in Shanghai since at least 2007.

HSBC CEO John Flint reiterated the bank’s goal to deliver a return on tangible equity of more than 11% by the end of 2020 in its H1 results presentation.

In the first half of 2018 the rate was 9.7% against 9.9% in H1 2017.

HSBC shares down by 18% YTD

HSBC profits before tax rose by 4.6% year-over-year to $10.7bn in the six months to end June.

The bank plans to spend an extra $15bn to $17bn on what it terms “growth and technology” between 2018 and 2020. This will increase its cost base by “low-to-mid-single digit percentages each year until the end of 2020.

HSBC’s share price is down by 18% since the start of the year.

Second half highlights include progress in drawing a line under legacy regulatory issues. In early October, HSBC agreed a $765m settlement relating to mis-selling mortgage backed securities ahead of the financial crisis.