Caixin
Apr 01, 2021 03:06 PM
FINANCE

Hong Kong Stock Exchange Hit by Dozens of Trading Halts After Earnings Deadline

Pedestrians walk past the Exchange Square complex, which houses the Hong Kong Stock Exchange in Hong Kong on March 23. Photo: Bloomberg
Pedestrians walk past the Exchange Square complex, which houses the Hong Kong Stock Exchange in Hong Kong on March 23. Photo: Bloomberg

(Bloomberg) —Trading in more than 50 Hong Kong-listed companies was suspended on Thursday, with some attributing the move to their failure to report earnings in time.

The mass suspensions come as March 31 was the last day to report annual results for Hong Kong-listed companies. GCL-Poly Energy and China Huarong Asset Management were among the firms that announced a trading halt. At least 9 Hong Kong companies suspended trading on April 1 of last year, versus about 25 on the same day in 2019.

“It’s a bit surprising to me that so many firms delayed their earnings and most of their filings didn’t explain very clearly,” said Daniel So, CMB International Securities Ltd. “This year surprisingly there are so many delays, much more than last year when the pandemic hit. The longer they delay in reporting earnings, the worse it will be for their share prices.”

Last year, almost all companies listed in Hong Kong were able to provide an earnings update to investors ahead of the March 31 deadline, overcoming difficulties posed by travel restrictions and an economic lockdown following the outbreak of the coronavirus.

Trading halts may dampen investor sentiment toward Hong Kong’s stock market, where the benchmark gauge briefly slumped into a technical correction late last month amid setbacks in its vaccine rollout and as traders rushed to sell pricey stocks in the wake of rising bond yields.

“Many investors be worried about their earnings and quality of reports, So of CMB International said. “If they report quickly and the audit report don’t have negative opinion on those companies, it should be fine.”

Yuzhou Group Holdings Co., a Chinese real estate firm, said on Tuesday that its auditor Ernst & Young’s “strict” accounting standards were partly behind a collapse in the company’s profit last year. The stock slumped more than 5% on Thursday, adding to its 7.9% slide from the previous session.

Hang Seng Index rose 0.7% as of 9:52 local time amid a broad rally in Asian stocks stoked by optimism over U.S. President Joe Biden’s $2.25 trillion infrastructure plan.

Contact editor Michael Bellart (michaelbellart@caixin.com)

Support quality journalism in China. Subscribe to Caixin Global starting at $0.99.

Follow the Chinese markets in real time with Caixin Global’s new stock database.

You've accessed an article available only to subscribers
VIEW OPTIONS
Share this article
Open WeChat and scan the QR code