Ending the Two-Hour Lunch in Hong Kong
Equities traders in Hong Kong may soon have to say goodbye to lunches of sautéed ostrich and crispy pigeon at Michelin-starred restaurants and settle for a sandwich at their desks instead. Charles Li, chief executive officer of Hong Kong Exchanges & Clearing, wants to cut the two-hour break, the longest of the world's 20 largest bourses, and start trading a half hour earlier.
Li's goal is to align Hong Kong's trading hours more closely with the exchanges in Shanghai and Shenzhen, which open at 9:30 a.m. and have a 90-minute lunch break at 11:30. Under Li's plan, the opening of the Hong Kong market would move from 10 a.m. to 9:30 a.m., with a one-hour or 90-minute lunch break, and close at 4 p.m. Mainland companies accounted for 47 percent of the HK$19.69 trillion ($2.5 trillion) market value of Hong Kong's Main Board on Sept. 30, exchange data shows, up from 16 percent in 1997, when the U.K. returned Hong Kong to China.
Li invited brokers and investors at the Hong Kong exchange to respond to the proposal by Oct. 29. Bankers such as Alex Wong are not happy at the prospect of losing the two-hour lunch. "One hour just isn't enough," says Wong, asset-management director at Ample Capital, who uses the break for meeting clients and attending presentations. "Waiting for the elevator alone could take 10 minutes." Benson Chan, chief executive officer of CASH Financial Services Group in Hong Kong, supports the move, pointing out that some of his firm's brokers already trade for their clients from outside the exchange via mobile devices such as Apple iPads.
On the London Stock Exchange there hasn't been a lunchtime trading break since at least 1950, spokesman Jonny Blostone says, while New York had lost the luxury of a lunch hiatus by 1887. Frankfurt, Paris, and London open for more than 8 hours daily, while New York trades for 6½ hours. Singapore is proposing to boost its hours to 8 from 6½ by also cutting its lunch break. Tokyo is considering increasing trading to more than 6 hours from 4½.
The two-hour lunch has been in place since the Hong Kong exchange was formed in 1986. The exchange gave up an effort to shorten it 7 years ago amid opposition from traders.
Now, as the exchange trades more mainland stocks, "it's only logical that trading times align more closely to the mainland," says Gavin Parry, managing director of Parry International Trading. "Shortening the market lunch break is another piece of the old-school brokers' life that is being dragged into modern times."
The bottom line: With the Hong Kong exchange growing more dependent on mainland Chinese stocks, Li wants his hours to match the mainland's.