HONG KONG (Bloomberg): Hong Kong warned it may effectively shut down the city, including its US$5 trillion stock market, on Friday (Sept 1) because of Super Typhoon Saola, which is approaching the financial hub after pummeling through northern Philippines.
The local weather agency said it will raise the storm signal to No 3, the second lowest level, by 5pm on Thursday and may elevate the alert by one level on Friday to No. 8 - the threshold at which schools close and most public transportation is stopped.
Saola has the potential to be the strongest typhoon to hit Hong Kong since Mangkhut battered the city five years ago. The storm earlier caused more than 69,000 people in the Philippines to evacuate and led to more than a dozen flight cancellations in Taiwan.
Though the observatory didn’t specify the time, markets would be disrupted if the No. 8 signal were to be raised between 7am and 3.45pm on Friday, and it would mark the second time this year that a storm affects trading in the city. Mainland China issued its highest typhoon warning at 6am
The typhoon was about 430km (267 miles) east-southeast of Hong Kong at 9am local time and will be closest to the city on Friday and Saturday, the Hong Kong observatory said. The storm is currently packing winds of 210km an hour, according to its website.
Saola, named after a rare deer-like mammal discovered in Vietnam in 1992, is forecast to move west-northwest at about 10km an hour across the northeastern part of the South China Sea and toward the coast of eastern Guangdong, the observatory said. There will be heavy squally showers and a storm surge to coastal low-lying areas, it said.
The financial hub delays morning trading of stocks, bonds and derivatives if Signal No. 8 or above is in force at 7am scraps the early session if the alert in force at 9am, and cancels the afternoon session if the signal isn’t lowered to No. 3 or below by noon.
Hong Kong is typically hit by about six typhoons annually, usually from June to October, but only a fraction of those result in market or school closures. The last time was in July because of typhoon Talim.
Trading halts due to severe weather are seen as increasingly antiquated given that the global finance industry adjusted to remote working amid the pandemic.
With most orders now received and executed electronically, the case is growing for Hong Kong to ensure continuous trading in bad weather. Financial Secretary Paul Chan said earlier this year that the city will explore arrangements to allow stock trading under severe weather.
Saola is expected to make landfall in the coastal areas of Guangdong and Hong Kong from Friday afternoon to night time, according to China’s National Meteorological Center. It suspended 121 trains, including the HK-China high-speed rail, until Wednesday, according to a statement.
China is also set to be affected by another typhoon nearer Shanghai, called Haikui. The country has activated a level four emergency response for floods in six provincial-level regions, including Guangdong and Shanghai, Xinhua reported on Wednesday. Haikui is forecast to affect the East China Sea around Sunday, it said.
China has been hit by bouts of extreme weather this summer which have caused flooding in the north that left dozens dead.
In the Philippines, the civil defence office reported Wednesday that 197,000 people had been affected by Saola, with farm damage from the super typhoon estimated at 189 million pesos ($3.3 million), mostly corn and rice.
Taiwan lifted its land warning for Saola after closing offices and schools and cancelling more than two dozen flights across parts of the south of the island Wednesday.