Get informed about market news and trends on Eastmoney, and choose Eastmoney Securities for one-stop account opening and trading services. HKEX Official Announcement! On September 16th, the Hong Kong Exchanges and Clearing (HKEX) announced that the exchange has received regulatory approval to implement severe weather trading. Severe weather trading will take effect from September 23, 2024. Securities transactions conducted at or through the exchange (including the Northbound and Southbound trades of the Shanghai-Shenzhen-Hong Kong Stock Connect) will continue to operate during severe weather conditions.
Similar to regular trading days, all exchange participants are required to continue providing trading-related services under severe weather conditions. Notably, just ten days prior, the Hong Kong stock market was closed for the entire day due to the impact of Typhoon ‘Mekong’. In the morning session yesterday, the three major Hong Kong stock indices fell by more than 1%, with the Hang Seng Tech Index experiencing a particularly significant drop. However, in the afternoon, the market situation changed dramatically, with major indices continuously rising, and both the Hang Seng Index and the Hang Seng Tech Index turned positive. By the close of the Hong Kong stock market on Monday, the Hang Seng Index rose by 0.31%, and the Hang Seng Tech Index increased by 0.51%. Kuaishou’s shares rose by more than 4%, NIO’s shares increased by nearly 4%, and Meituan and XPeng Motors’ shares rose by nearly 3%. Additionally, Hong Kong gold stocks rose, with China Gold International and Shandong Gold both increasing by more than 4%. HKEX Major Announcement on September 16th, HKEX announced that the exchange has received regulatory approval to implement severe weather trading. Severe weather trading will take effect from September 23, 2024. Securities transactions conducted at or through the exchange (including the Northbound and Southbound trades of the Shanghai-Shenzhen-Hong Kong Stock Connect) will continue to operate during severe weather conditions. Similar to regular trading days, all exchange participants are required to continue providing trading-related services under severe weather conditions. Just three months ago, on June 18th, the Chief Executive of the Hong Kong Special Administrative Region, John Lee, announced that HKEX would not suspend the market during severe weather. Starting from September 23rd, the Hong Kong securities market will maintain operations during severe weather, and investors will still be able to trade even when Hong Kong raises a No. 8 gale warning or higher, or issues a black rainstorm warning signal. This change signifies that Hong Kong will end its long-standing tradition of closing the market during typhoons and heavy rain. The market operation arrangements during severe weather are linked to the severity of typhoons, rainstorms, and extreme conditions as published by the Hong Kong authorities. In this regard, HKEX’s Chief Executive, Nicolas Aguzin, stated: ‘This initiative not only helps to maintain market continuity but also ensures that investors can manage risks under various climatic conditions. ‘ According to reporters from Securities Times who spoke with several brokers in Hong Kong, although Hong Kong is an international financial center, its stock trading system is not as advanced as that of mainland China, and in fact, many older investors still rely on placing orders by phone.Power outages or communication signal issues can lead to losses for investors, which is unfair to the market. On June 17th, former HKEX chairman, Laura Cha, stated during an event that the suspension of the Hong Kong stock market due to typhoons causes significant market losses, and she strongly supports the government’s research into the ‘No-Stop Trading’ policy during typhoons. This measure would help to align trading days with other international financial centers.
Cha pointed out that in the past, employees could not work due to transportation halts during typhoons, leading to a halt in trading. With the electronic trading advancement, ‘No-Stop Trading’ has been continuously promoted to keep up with the times and increase trading activities. It is worth mentioning that severe weather has led to multiple suspensions of the Hong Kong stock market, with four occurrences in 2023. Following a full-day suspension on September 1st last year due to Typhoon Sulu, another full-day suspension occurred on September 8th due to a black rain warning and the activation of extreme conditions, totaling two suspensions in September alone. Wind data statistics show that the average daily transaction volume of the Hong Kong stock market in the first eight months of last year was 112 billion Hong Kong dollars. Based on this average, the two trading day suspensions in September resulted in a loss of 224 billion Hong Kong dollars in transaction volume. How to ensure operations? On November 30th last year, HKEX published a consultation paper proposing suggestions for maintaining normal operations of Hong Kong’s securities and derivatives markets under severe weather conditions and sought market opinions on operational models and related arrangements. ‘This reflects HKEX’s determination to enhance Hong Kong’s resilience and attractiveness as a leading global financial center, providing investors worldwide with a broad and diverse range of products and platforms.’ HKEX suggests that trading arrangements will no longer be affected by severe weather. HKEX plans to keep its securities and derivatives markets open to all investors as usual during severe weather, including the Shanghai-Shenzhen-Hong Kong Stock Connect Southbound and Northbound services, holiday trading of derivatives, and after-hours trading. During severe weather, trading, post-trading, and listing arrangements will be essentially the same as normal trading days, but some necessary adjustments will be made to ensure the operational resilience of the market and the safety of market participants. Some services provided by physical business points will not be available. For instance, participants who cannot deposit physical securities into the clearinghouse for settlement due to the closure of physical business points during severe weather may be granted some repurchases exemptions. If the final registration date for some corporate actions falls on a day with severe weather, it is suggested to postpone the date, as participants holding physical securities for corporate actions will be affected by the closure of physical business points. ‘Personnel safety is always an important consideration, and we encourage market participants to work remotely as much as possible during severe weather. ‘The Hong Kong Stock Exchange (HKEX) has confirmed that during severe weather conditions, its trading, settlement and delivery, and market data systems can all be accessed remotely online. The infrastructure and operational methods have been optimized multiple times, reducing the necessity for market participants to log in to systems at the office. It is understood that the current investors of HKEX generally use electronic means for trading, so even if banks or brokers do not provide physical HKEX branch trading services during severe weather, it should not significantly impact market activities.
Market participants need to ensure that their remote operations run smoothly and that HKEX can transfer funds without the use of physical services, preparing for trading during severe weather. In response to this issue, the Hong Kong Association of Banks and the Hong Kong Interbank Clearing Limited have cooperated with a dedicated team to confirm that during severe weather, relevant banking services will operate as usual. For instance, designated banks and delivery banks related to the clearing houses will provide electronic check settlement and electronic transfer services normally, fully supporting the operations and fund settlement needs of settlement participants. To trade stocks, start by opening an account! Choose Oriental Fortune Securities, with market transactions managed in one APP. >> (Source: Securities Times)