Can HKEX avoid another ‘mess’ when closing auction session is revived on Monday?
Stockbrokers claim order prices capped at 5 per cent from the reference price will not prevent the chaos that ensued after the pricing mechanism’s first launch in 2008
Concerns remain over plans by Hong Kong Exchanges and Clearing (HKEX) to reintroduce a closing auction session on Monday (July 25), with stockbrokers particularly still worried that the chaotic scenes experienced by its predecessor mechanism, eight years ago, could be repeated.
HKEX says the new mechanism have been fine-tuned in that time, and that it is responding to a strong industry need to execute trades at securities’ closing prices.
While fund managers and institutional investors believe the move is needed to boost turnover and to keep the city in line with international markets.
But Christopher Cheung Wah-fung, a lawmaker for the financial services sector who is a broker himself, says the local broking community still has serious doubts over the controversial relaunch, which will use the tender method to determine closing prices.
“When it was first launched in 2008, it was a mess and there was a lot of manipulation during the tendering period,” Cheung said.
