Hong Kong scraps all stock trading on Friday as typhoon nears Hainan
HONG Kong scrapped trading of its US$4.9 trillion stock market on Friday as the city prolonged a storm warning due to Super Typhoon Yagi, which skirted the region overnight toward southern China.
The exchange cancelled afternoon trading after the city’s weather bureau said it would extend a Typhoon Signal 8 warning until 12.40 pm. The morning session had already been suspended because of the storm alert.
This will likely be the final time a typhoon forces a halt to trading, with Hong Kong ending its decades-long practice of shutting markets during the severe storms from Sept 23. The last suspension was in September of last year after the heaviest rainstorm since records began in 1884.
Under the stock exchange’s current rules, if the Signal 8 alert isn’t lowered by 9 am, morning trading is cancelled. If the weather warning remains in place at noon, the afternoon session is then suspended.
The Friday halt comes as Hong Kong bolsters efforts to boost the liquidity and improve the appeal of its flagging stock market, including stamp-duty cuts on stock trading. The benchmark Hang Seng Index has shed more than 5 per cent over the past 12 months, underperforming most global gauges.
Hong Kong International Airport, one of the world’s top passenger and air cargo hubs, was largely operating as normal with around 200 flights cut, affecting around 20 per cent of daily air traffic. The government had already announced the suspension of school classes on Friday.
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The Hong Kong Observatory issued the Signal 8 on Thursday evening — the third-highest alert, warning of gale or storm force winds. It will be lowered to Signal 3. Yagi is now about 400 km south-west of the city and barreling toward Hainan Island with destructive winds and heavy rain.
Yagi has maximum sustained winds of 241 kmh, according to the Joint Typhoon Warning Centre. The system is equivalent to a Category 4 hurricane on the five-step Saffir-Simpson scale, which is considered a major storm that has the capacity to inflict catastrophic damage.
At Haikou on Hainan, all flights in and out of the main airport were cancelled, and most services in and out of Sanya airport were scrapped. Cancellations at the two major airports have affected almost 1,000 flights, data from Chinese flight tracker VariFlight showed.
SEE ALSO
Once Yagi clears Hainan, it’s forecast to track toward Vietnam. Authorities are preparing to suspend operations at four northern airports — including Hanoi’s Noi Bai International Airport — in preparation for the typhoon. BLOOMBERG
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