Hong Kong stock exchange to continue trading during typhoons from September 23: John Lee
Hong Kong’s bourse operator will allow trading to continue as normal during typhoons and torrential rains starting from September 23, the chief executive has announced, in an effort to enhance the city’s gateway role for both global and mainland Chinese markets.
City leader John Lee Ka-chiu said on Tuesday he had accepted suggestions to scrap a 70-year-old practice of halting trading on the Hong Kong Exchanges and Clearing (HKEX) or shutting the market entirely when the local weather forecaster issued a No 8 typhoon signal or black rainstorm alert.
Lee said the new arrangement was in line with standards applied in global stock exchanges, including those in Shenzhen and Shanghai, which maintain operations under severe weather.
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“As an international financial centre, Hong Kong has no reason not to follow the practice,” he said.
He also described the stock exchange halt during severe weather as “abnormal” given that most transactions were electronic.
Under the new arrangement, investors can trade Hong Kong stocks and derivatives, and buy mainland A-shares and other products through Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect amid severe weather.
Tropical cyclones and severe rainstorms have forced the stock market to shut down 11 times since 2018. Photo: Dickson Lee
Lee referred to a recent public consultation by HKEX, which showed that 90 per cent of the market participants, including brokers and banks, had expressed support for the new arrangement.
“Not suspending trading during severe weather can strengthen HKEX’s competitiveness and enhance Hong Kong’s role as a gateway for both global and mainland markets,” Lee said.
Hong Kong is among the very few major markets that suspend stock and futures trading in extreme weather events. The city abandoned its physical trading in 2017 in favour of electronic transactions.
Tropical cyclones and severe rainstorms have forced the market to shut down 11 times since 2018, according to exchange data.
In 2023 alone, HKEX had to stop trading because of typhoons Talim, Saola and Koinu, and several black rainstorms.
Last November, the bourse operator issued a consultation paper to propose scrapping the decades-old practice.
Finance sector lawmaker Ronick Chan Chun-ying welcomed the arrangement on Tuesday, saying it would allow the city’s stock market to stay abreast with the global ones.
“Hong Kong’s capital market has large participation from global investors. They need to rebalance their global portfolios on trading days. Many Hong Kong-listed companies are also listed in mainland China and overseas,” he said.
“Therefore, local, mainland and international investors do not wish to miss trading and investment opportunities due to Hong Kong’s local weather.”
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