Each yuan-counter stock will prepend an “8” – a number associated with wealth in Chinese culture – to the corresponding stock codes of the Hong Kong dollar counter. The two categories of shares will be fungible, with the same voting rights and dividend eligibility.

The ability to quote shares in renminbi “offers flexibility and liquidity for shareholders and potential investors,” according to a statement by the Chinese phone maker Xiaomi, whose shares were designated the new code “81810” from the previous “1810.”

Yuan-denominated transactions were active in early morning trading. Alibaba crossed 800,000 yuan in the first 20 minutes, while 1.8 million yuan of Tencent shares changed hands and Ping An Insurance had 890,000 yuan worth of shares traded.

The nine taking part financial firms include BOCI Securities and CICC, which will act as market makers and offer buy-sell quotes. However, investors can also trade the yuan shares via their own brokers or banks.

Initially, only Hong Kong or international investors can trade the yuan shares, but mainland investors will later be allowed to trade via the southbound stock connect scheme. The HKEX did not offer a timetable for mainland participation.

“The RMB-HKD dual counter is expected to provide a positive boost to Hong Kong cash equity trading volumes, backed by a possible increase in southbound inflows from mainland China and increased activity by international investors that hold large balances of offshore yuan,” said Charles Lam, managing director and Hong Kong head of markets at Citibank, a unit of US-based Citigroup.

Lam said the new model will address a limitation in the current southbound trading facility, where mainland investors previously had to put up a 2 per cent margin for foreign exchange movements when buying stocks in Hong Kong dollars.

“Allowing southbound investors to directly buy H-shares using yuan could eliminate this foreign exchange risk and attract more buying flow from mainland investors, without the exchange cost,” Lam said.

Since the acceleration of yuan internationalisation in 2009, many overseas companies have come to hold large portfolios of offshore yuan. Hong Kong depositors now have 1 trillion yuan (US$140.3 billion) in offshore yuan funds that can earn only a modest return when deposited with a bank. HSBC, the city’s biggest lender, currently offers a mere 0.1 per cent per annum as interest for deposits of over 5,000 yuan.

“The launch of the dual counter in Hong Kong provides a new avenue for these international investors to deploy and diversify their offshore yuan portfolio for more attractive returns,” Lam said.

Hong Kong Monetary Authority CEO Eddie Yue Wai-man said the introduction of the yuan counter will encourage more Middle Eastern companies to accept yuan to settle trades.

“We need to provide more yuan bonds, stocks and other products for overseas investors to trade. It will encourage the UAE and other Middle East companies to be willing to accept yuan to settle their trade with Chinese companies,” Yue said in an interview last week.