HKEx board lengthens trade one hour
Hong Kong Exchanges and Clearing still has one of the shortest trading days of the world's bourses after its board of directors yesterday approved an extension of just one hour.
Sources said exchange executives submitted a two-hour extension proposal to the board to vote on, cutting the two-hour lunch break to an hour and putting back the close from 4pm to 5pm. However, one board member said it shared the view of stockbrokers that a one-hour lunch break might be too short, while a 5pm close would add to risks because brokers would not have enough time to deposit cheques.
The exchange said the extension would be implemented at the end of this year or early next year to allow enough time for the trading system to be prepared.
The new afternoon trading session will run from 2pm to 4.30pm, while the 10am to 12.30am morning session is unchanged.
The derivatives market will trade from 2pm to 4.45pm, instead of 2.30pm to 4.15pm. Morning trade, from 9.45am to 12.30am, is unchanged.
The one-hour extension represents a substantial scaling back from a radical HKEx proposal last year to extend trade by seven hours - from 10am to 6pm with no lunch break followed by a three-hour evening session.
Hong Kong's five-hour trading day will be 90 minutes less than New York and three hours less than London.
HKEx chief executive Kwong Ki-chi said the extended trading hours would be more convenient for investors.
He added: 'HKEx will monitor market activities during the extended trading hours and revisit the arrangement in light of the experience gained.'
The decision to extend the trading hours by just one hour marks another triumph for brokers after the government this year agreed to delay scrapping the minimum brokerage commission for a year to April next year.
It is also the second time that Secretary for Financial Services and the Treasury Frederick Ma Si-hang has expressed a different opinion on market reform than HKEx.
Last week he suggested trading hours be extended by just one hour instead of two. On Wednesday, he announced the HKEx listing committee would be retained, two months after the exchange said the committee would be removed in October.
However, Mr Ma said he was not opposed to the HKEx's polices. He was only suggesting changes according to brokers' demands. He said he had supported the exchange plan to abolish the minimum commission system.
Chen Po-sum, chairman of the Hong Kong Institute of Securities Dealers, welcome the scaling back of the extension, saying it would not bring added risks to the market.
Christfund Securities managing director Christopher Cheung Wah-fung also said the one-hour extension would be enough.
'The stock market has been so quiet recently that there is no guarantee there will be more turnover even after it is opened for a longer time,' he said.
'The one-hour extension will not add too much to costs for brokers, while it may also help to attract some more trading.'