Hong Kong’s bankers and traders hunkered down at home or booked hotels near the office as Super Typhoon Ragasa descended on the Asian financial hub.
The big international banks, including Goldman Sachs Group, Morgan Stanley and HSBC Holdings, told most employees to work from home before the typhoon unleashed a deluge of rain and sustained winds of up to 195 km per hour on Wednesday.
Ragasa marked the biggest test yet for a change implemented last year by the Hong Kong stock exchange to keep trading open during severe weather.
Trading volume in Hong Kong’s benchmark index was about 16% below the average of the past 30 sessions, according to Bloomberg-compiled data. The Hang Seng index rose 1.4%.
The Hong Kong Observatory, the local weather bureau, lowered its highest storm warning during the day as Ragasa slowly passed the city. It expects to keep a storm signal in-place before 8pm as rain and winds persist.
With markets open, most firms will need some staff in the office to execute trades and set prices. That created a rush for centrally located hotel rooms as workers seek to avoid long commutes from home.
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The Mandarin Oriental, across from HSBC’s local head office, was almost fully booked when checked by Bloomberg News on Tuesday. Rooms have also been snapped up at downtown hotels such as the Four Seasons and those connected to the Pacific Place mall on the edge of the central banking district.
Bankers and traders who were needed in the office were greeted with largely empty streets early Wednesday. The city has closed government offices and schools. Passenger flights in and out of Hong Kong were suspended for 36 hours from 6pm local time on Tuesday.
Ragasa has pushed some conferences and forums scheduled for Wednesday and Thursday online, including a gathering on fixed income and currencies. Loan bankers rushed to get paperwork signed to keep deals moving, while others dashed to the airport to catch flights ahead of the shutdown to close transactions.
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Deal delays
Deals were pushed back in Hong Kong. Zijin Gold International, which is seeking to raise US$3.2 billion ($4.12 billion) in the world’s biggest initial public offering in months, delayed the timetable of its offering, as did Shenzhen Hipine Precision Technology.
Chery Automobile Co., China’s biggest car exporter, is still set to list its shares in Hong Kong Thursday after raising US$1.2 billion from its IPO. But the typhoon has led the company to scrap its listing ceremony at the Hong Kong Stock Exchange, a representative for the company said.
Activity at brokerages was already curtailed on Tuesday, when the city hoisted its signal 8. Ragasa could be the most dangerous typhoon in the city since Mangkhut in 2018, which caused economic losses, including insurance claims, of HK$4.6 billion ($761 million).
“It’s just me, one trader, and our IT guy holding down the fort at the office now,” Thomas Ip, executive director at Gaoyu Securities, said in an interview on Tuesday. Clients were also closing trading positions ahead of the storm, he said.
“They’re hesitant to act until the storm passes, especially with forecasts saying this could be worse than Mangkhut,” Ip said. “Most are staying on the sidelines today and tomorrow, planning to re-enter on Friday.”
Hong Kong has one of the best-performing stock markets in the world this year, with its benchmark index gaining more than 30%, according to Bloomberg’s developed markets monitor.
