Hong Kong exchange, accountants mull extending reporting deadline, unaudited earnings amid coronavirus-led China travel curbs
- Hong Kong exchange and accounting body discuss reporting deadline amid travel curbs related to Wuhan coronavirus outbreak
- About half of Hong Kong-listed companies are based in mainland China
Hong Kong Exchanges and Clearing and the accounting profession have discussed several options to overcome potential delays in earnings reports by listed companies by March 31, as auditors face travel restrictions in mainland China following the outbreak of the Wuhan coronavirus.
They considered an extension to the reporting deadline for companies affected by the outbreak, or allowing them to publish unaudited earnings, according to Johnson Kong Chi-how, president of the Hong Kong Institute of Certified Public Accountants. No decision has been taken pending further talks, he added.
Both parties held an urgent meeting on Thursday morning amid concerns half of the listed firms in Hong Kong might miss the deadline as authorities have halted domestic transport networks and locked down 10 cities, including Wuhan, the epicentre of the disease, in central Hubei province to contain the viral outbreak.
“We will need to have a quick decision for the exchange to issue a guideline on how to handle the situation,” Kong said by phone after the meeting with HKEX executives. “It is highly likely the auditing work will be seriously delayed, as many accounting firms have asked their staff to work from home. They also cannot travel northward due to mainland traffic bans.”
More meetings with the HKEX and other regulators such as the Securities and Futures Commission and the Financial Reporting Council will be held soon, Kong said.
There were 1,241 mainland Chinese companies listed in Hong Kong at the end of 2019, making up half of the 2,449 members of the bourse, according to exchange data. They accounted for 73 per cent of the exchange’s market capitalisation and 83 per cent of the average daily turnover, reflecting their dominance and importance over the years to Asia’s third-largest capital market.
“We are closely monitoring developments, and are working with our regulator and other stakeholders to consider the circumstances of the issuers in fulfilling their obligations to publish financial results under the listing rules,” a HKEX spokeswoman said in an email.