Hong Kong avoids mass trading halt as firms seek deadline waiver

DOZENS of Hong Kong companies requested last-minute extensions on a May 15 deadline to release their audited annual results, allowing them to avoid trading suspensions for now.

At least 33 companies have filed for a waiver to the Hong Kong Exchange on the deadline, according to filings, with most of them citing Covid-19 related disruptions for the delay. The firms include distressed Chinese property developer Guangzhou R&F Properties, whose auditor PricewaterhouseCoopers resigned last month.  

The bourse has said it would consider such applications on a case-by-case basis. As of early Monday (May 16), at least 2 stocks on the Hong Kong Exchange had their trading halted.

The small number of trading halts comes as a relief for the local stock market, where the benchmark Hang Seng Index has fallen 15 per cent this year. Traders had been bracing for a fresh barrage of suspensions on top of dozens that had already been halted on Mar 31 for failing to submit unaudited results. 

Hong Kong’s stock market has had a bumpy ride this year amid concerns about China’s strict Covid lockdowns, rising US interest rates and a property market downturn on the mainland. China may also report the weakest monthly economic indicators since the outbreak of the pandemic 2 years ago on Monday. 

Trading suspension in Hong Kong can take place due to various reasons. In terms of earnings, a company’s shares will normally be halted if it doesn’t report audited results 3 months after the fiscal year ends, according to exchange rules. 

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Due to pandemic-related delays, firms have been allowed to submit unaudited figures by Mar 31 and file the audited version by May 15, for which a number of firms have asked for an extension. BLOOMBERG