Hong Kong to Keep Stock Market Open During Severe Weather Conditions — Update
By Amanda Lee and Kimberley Kao
Hong Kong will allow trading on its exchanges during severe weather conditions, as part of the exchange's efforts to maintain the financial center hub's appeal to investors.
The new rule take effect from Sep. 23, Hong Kong Chief Executive John Lee said at his weekly press conference.
The decision will end the exchange's decades-long practice of halting trading during severe rain and typhoons, and align it with its counterparts in Shenzhen and Shanghai.
"At the moment, trading is mostly conducted through electronic means, there's no reason why Hong Kong is the exception when it comes to maintaining trading under extreme weather conditions," Lee said.
Hong Kong is prone to severe typhoons which closes schools and offices. According to the Hong Kong Observatory, the financial center is typically hit by five to eight typhoons in a year. Currently, trading on the exchange is halted if the Hong Kong Observatory posts a typhoon signal no. 8 and above.
Moody's Analytics estimates that the Hong Kong market has been shut 11 times since 2018 as a result of tropical cyclones and severe storms.
This change removes the risk of losing access to trading and liquidity due to adverse weather, said Redmond Wong, chief China strategist at Saxo Markets.
"Investors don't like uncertainty and will welcome better access to trading and liquidity," Wong added.
Yeap Jun Rong, a market strategist at IG, said that "aligning with other international exchanges' practices may help to keep the Hong Kong Exchange competitive" but noted that such shutdowns have been infrequent, and the move will likely have limited impact on overall trading activity.
Write to Kimberley Kao at kimberley.kao@wsj.com
(END) Dow Jones Newswires
June 18, 2024 04:09 ET (08:09 GMT)
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