Shanghai Stock Exchange pulls out all the stops to keep trading going as city government locks down Pudong area to contain Covid-19

Hundreds of staff are working in a ‘closed loop’, essentially living in the office, to ensure trading continues after Pudong New Area went into lockdown
Other measures include virtual IPO ceremonies and fast-track approvals for bond issuance by pandemic-hit companies

China stock market

Daniel Renin Shanghai

Published: 6:30pm, 28 Mar 2022

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Shanghai’s stock exchange is going to extraordinary lengths to keep the bigger half of the world’s second-largest capital market ticking, locking technicians, compliance officers and back-office clerks in the building, as China’s premier commercial city goes into a rolling lockdown to contain a resurgent outbreak of Covid-19.

Hundreds of staff at the bourse are working in a “closed loop”, essentially living in the office, to ensure trading goes on as normal after the whole of Pudong New Area was shut down to halt the spread of the Omicron variant.

The biggest trading house of the mainland’s three stock exchanges, based in Pudong’s Lujiazui finance and trade zone, said it would be vetting initial public offering (IPO) applicants seeking to list on the technology-heavy Star Market, China’s answer to the Nasdaq.

It also said it would make better use of online communication tools with issuers, and hold IPO debut ceremonies virtually at the start of trading for newly listed companies.

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“The Shanghai Stock Exchange will make special arrangements to battle against the Covid-19 pandemic, optimising regulatory framework and improving services to support the real economy and invigorate the market,” it said in a statement on Sunday evening. “We will strive to maintain steady operations of the market.”

A large number of exchange employees have been staying at their offices since last week amid a resurgence of coronavirus cases in Shanghai, China’s commercial and financial capital, according to two sources with knowledge of the matter.

The sources said staff have ben told not to discuss their working status as the outbreak raged. The Shanghai municipality made the surprise decision on Sunday evening to impose a lockdown on a vast swathe of the city.

Pudong New Area, on the eastern bank of Shanghai’s Huangpu River and covering an area of 1,200 sq km (465 sq mile), went into a four-day lockdown from 5am on Monday, according to a statement by the Shanghai government.

The area, with a population of 5.7 million people, is home to the mainland’s key financial trading houses including the stock, futures, gold and financial derivatives exchanges.

Among other measures rolled out to keep the market going while minimising the risk of infections, the stock exchange said companies will be allowed to delay the filing of financial reports if their operations were affected by the pandemic.

It will also fast-track approvals for bond issuance by pandemic-hit companies.

The bourse did not say how long the special arrangements would be effective.

On Monday, the benchmark Shanghai Composite Index edged up 0.1 per cent to 3,214.50 and the main gauge tracking the Star Market lost 1.5 per cent to 1,090.73.

Just over 2,000 mainland companies are traded on the Shanghai exchange’s main board while about 400 technology firms are listed on the Star Market.

As of Monday, Shanghai had reported nearly 15,000 infections since the Omicron outbreak started at the beginning of March. About 400 patients had mild symptoms while the others were asymptomatic.

The local government, which has been adamantly opposed to a citywide lockdown, made a policy U-turn on Sunday evening.

After the lockdown of Pudong is lifted on April 1, Puxi, on the western bank of Huangpu River, will go into lockdown for four days.

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