Sandbags placed near the waterfront in a residential area during a No. 8 storm signal raised for Super Typhoon Saola in Hong Kong, China, on Sept. 1, 2023.
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Hong Kong will no longer shut down its stock market during severe weather conditions, according to a Bloomberg report citing people familiar with the matter.
The planned move, which could reportedly start as soon as September, will mean that Hong Kong’s $4.2 trillion market (32.8 trillion Hong Kong dollars) won’t stop trading in the event of typhoons and heavy rainstorms.
The Hong Kong exchange typically halts trading when a typhoon signal or a so-called “black rainstorm warning” is issued.
The previous CEO of Hong Kong Exchanges and Clearing, Nicolas Aguzin, told CNBC in 2022 that the bourse was reviewing that protocol.
According to the Hong Kong observatory, there were 11 tropical cyclones reaching typhoon intensity or above in 2023 — that’s less than the 60-year average of about 15 from 1961 to 2020.
The Hong Kong exchange is expected to announce the proposed framework in the next few weeks, according to the people who spoke to Bloomberg. They said the plan is still being finalized and is subject to last minute changes.
The proposal will facilitate continued trading and “strengthen Hong Kong’s position as a two-way gateway between the international and Mainland markets and consolidate our competitiveness as an international financial center,” a government spokesperson told Bloomberg.
“It remains our target to announce relevant implementation details as well as the timetable in the middle of this year.”
The report said top government officials have pushed hard to have the plan in place as early as possible and a three-month preparation period is seen as feasible, the people said.
However, a three-month preparation period will mean the exchange is likely to implement the plan in the middle of the typhoon season.
Currently, the Hong Kong exchange cancels the morning session if extreme weather conditions persist beyond 9 a.m. Hong Kong time and before 11 a.m. A full day’s trading will be cancelled if extreme conditions extend beyond 12 p.m.
The typhoon season in the Pacific usually begins with less severe storms in April and does not end until November, with the most severe typhoons usually occurring in August and September, according to climatological database World Info.