The "through train" scheme for Mainlanders to invest in Hong Kong equity is an important step towards an orderly outflow of funds from the nation, Monetary Authority Chief Executive Joseph Yam says.

In his latest Viewpoint article published today, Mr Yam said the launch of the scheme seems to be taking longer than expected, perhaps understandably because the implementation details need to go through a co-ordination process among Mainland authorities.

He said it is important to remember that stock prices fluctuate, sometimes wildly, and it is always difficult to judge the right entry points. But investors themselves, not the Government, should be in the best position to decide when, where and at what prices to invest. To help them make such decisions, it is important to increase their knowledge about the financial market in which they invest, in this case the Hong Kong stock market.

At the initial stage of the "through train" scheme, it may also be helpful to impose a minimum amount of investment or limit access to the scheme to investors in major cities who probably are more aware of the risks involved and in a better position to manage them than other investors in the country. 

He said the "through train" scheme will undoubtedly benefit Hong Kong, bringing in more business and helping the development of its financial market, but that is not its purpose.

"The scheme is about inducing an orderly outflow of capital from the Mainland to help address the issues arising from the large and persistent balance of payments surpluses. It does seem to me that the 'through train' is the right step for the country to take to tackle its macro economic problems."