HK finance chief says monitoring markets to ensure stability

[HONG KONG] Hong Kong authorities have been closely monitoring last week's stock market volatility to ensure orderly operations and smooth settlements, according to Financial Secretary Paul Chan.

Although there was an increase in short-selling, such positions versus total market capitalisation was at 1.3 per cent, similar to the long-term average, Chan wrote in a blog post on Sunday (Mar 20). There was no excessive accumulation of derivatives positions and brokerages can cope with market risks, he said.

Equities in Hong Kong and China went on a roller coaster ride last week, with a historic rout in the first 2 sessions quickly reversing on Wednesday as China made a sweeping set of promises to stabilise markets and support the economy.

The benchmark Hang Seng Index gained 4.2 per cent last week, including a jump on Wednesday that was the biggest since 2008.

Chan also warned that Hong Kong's unemployment rate will continue to deteriorate rapidly after rising to 4.5 per cent in the 3 months ended February, as the city grapples with the fifth wave of the Covid-19 pandemic. He said the economy will see negative growth in the first quarter. BLOOMBERG