First typhoon trading day tests city’s brokerages

A typhoon is brewing over Hong Kong but it’s business as usual for the city’s $5.4 trillion stock market.

The financial hub has ended a decades-long practice of shutting its markets during severe weather, and Thursday marks the first time the stock exchange will be operating on such an occasion. Authorities issued a so-called Typhoon Signal 8, the third highest, on Wednesday as tropical storm Toraji edged closer to the Pearl River Estuary. The alert will be lowered at 10:20 a.m. local time.

The move to stay open is part of a government push to follow major financial hubs that have scrapped rules to shutter their markets during bouts of severe weather. The practice of halting trading was seen as being increasingly out of date after the pandemic years showed markets could function even as most workers were stuck at home.

“We have gone through the Covid days, so working from home is not a big deal,” said Steven Leung, executive director at UOB Kay Hian Hong Kong. “We are ready for this adjustment and the typhoon isn’t too bad as well. So long as there is good momentum in the market, people will want to trade.”?

The move to stay open is also aimed at improving liquidity and boosting the stock market’s appeal among investors. The Hang Seng Index fell almost 1% in early Thursday trading, paring its year-to-date gain to 15%.

Since 2018, Hong Kong markets have been shut on 11 occasions due to severe weather conditions, including four sessions in 2023, the government said in June.

(Bloomberg)