Hong Kong's stock exchange, which is operated by Hong Kong Exchanges and Clearing (HKEx), is studying a "London- Hong Kong Connect" program for trading of metals that would link commodity markets in the two global financial centers.

The program, which was proposed by HKEx CEO Charles Li Xiaojia last year, was among the cooperation initiatives announced during President Xi Jinping's State visit this week to the UK.

A link would enable market participants in Hong Kong, which include some of the biggest commodity importers in the world, to hedge their trading exposure through the London Metal Exchange (LME), which is the global hub for trading of metals. HKEx also owns the LME.

"Enhanced market access is a key component of our strategy," said Li.

"This link aims to expand the potential investor base of the LME market, give the LME a new presence in Asia, where it has many opportunities, and support the development of Hong Kong as a commodity trading center," he said.

The exchanges have signed a "non-binding memorandum of understanding" for the link.

Regulatory approvals are pending and no timetable has been announced.

The exchanges hope the link will also allow them to offer yuan-denominated futures and other commodity products to European investors, which would expand the use of the Chinese currency globally.

On Tuesday, China's central bank sold its first dim sum bond in London.

China launched the Shanghai-Hong Kong Stock Connect program in November 2014, which analysts said marked a new stage in yuan globalization.

On Thursday, the turnover for northbound trading in Shanghai-listed shares was 6.28 billion yuan ($987.8 million), while the southbound trading turnover in Hong Kong-listed shares was HK$1.7 billion ($219.3 million), data from the HKEx showed.

"The success of the Shanghai-Hong Kong Stock Connect program can't be simply used for reference when building the [metals] trading link between Hong Kong and London, but it can boost people's confidence in the Chinese mainland capital market, which may help fast-track the [metals program]," Li Nian, an industry analyst at Shanghai-based Shenwan Hongyuan Securities, told the Global Times on Thursday.

Some market observers urged caution after the recent turmoil in the mainland stock market.

"We should not be too optimistic for now, because if you look at the Shenzhen-Hong Kong stock connect program that has been talked about for a long time, you can't expect the Hong Kong-London metals connect to be rolled out immediately as it involves international cooperation," said a commodity trader in Hong Kong who prefers not to be named.

Read more in Special Coverage: