Hong Kong will end its decades-long practice of closing markets during typhoons and severe storms starting September 23.
There was widespread support to allow trading in extreme weather conditions and to follow the example of other cities, CEO John Lee said at his weekly news conference. According to him, there will be enough time during the transition period.
The city stands out among major financial centers for having rules for closing markets during severe weather conditions. The practice has been seen as increasingly outdated after years of the pandemic showed that markets can function even with most workers stuck at home.
Typically, five to eight typhoons hit the city each year, but not all of them disrupt traffic and schools.
Local government pushed hard on the change and called for coordination between the stock exchange, securities regulator and central bank, even as many smaller brokers expressed opposition due to the costs and difficulties of remaining open.
“I believe this is a positive development for the Hong Kong market as it removes a source of uncertainty around market access and liquidity,” said Redmond Wong, chief China strategist at Saxo Markets.
The trading halt has also drawn criticism because it stops flows through Stock Connect, which is linked to markets in Shanghai and Shenzhen. An average In May, the northbound canal traded 125 billion yuan (US$17.2 billion) per day, and southbound traded HK$56 billion (US$7.2 billion).