Hong Kong stockbrokers may lose their traditional two-hour lunch break

HONG Kong stockbrokers may lose their traditional two-hour lunch break, the longest among the world's 20 largest markets, as the exchange seeks more business from China.

Hong Kong Exchanges & Clearing, operator of Asia's third-biggest sharemarket, will start talks on the move that chief executive Charles Li said would align the city more closely with China.

The exchange wants trading to begin 30 minutes earlier at 9.30am with a one-hour break at noon, keeping the close at 4pm. Shanghai's trading hours run from 9.30am to 3pm with a 90-minute break between 11.30am and 1pm.

''God knows if that would mean ordering McDonald's for company lunch presentations,'' said Francis Lun, general manager at Fulbright Securities in Hong Kong. ''No more long lunches at the Conrad or Shangri-La hotels.''

The move comes seven years after the exchange withdrew an attempt to shorten the two-hour lunch break amid opposition from brokers. Mr Li revealed the newest plan this week after the bourse announced a 3 per cent increase in first-half profit.

Hong Kong is competing with Shanghai to maintain its position as China's pre-eminent financial centre and is anticipating a surge from mainland investors as China relaxes currency controls.

Mr Li said Hong Kong's bourse was ready for yuan-denominated products, which will start when China's policymakers find a way to allow free inflow and outflow for the currency. The exchange's three- year strategic plan, released in March, included plans for products such as yuan-denominated bonds to capitalise on the liberalisation of China's financial markets.

''Extending trading hours is a good call, particularly in terms of alignment with China,'' said Steven Leung, director of institutional sales at UOB-Kay Hian in Hong Kong. ''An hour for lunch will be a little more rushed. We now have sufficient time for meetings with Hong Kong-based listed companies over lunch.

''But with that change, we'll probably need someone back in the office to cover for us and handle trading.''

An average $HK61.8 billion ($A8.88 billion) of shares traded daily this year in Hong Kong, exchange data show. This compares with 105.6 billion yuan ($A17.3 billion) in Shanghai, home to the bigger of China's two exchanges.

Jesse Lentchner, chief executive officer of BTIG LLC's Asia Pacific operations said that while extended hours allowed more people in more time zones to access a given market, longer trading days did not necessarily lead to more stock changing hands.

''There is a core amount of trading that happens in a market and if you stretch that out, you lose a certain amount of heat,'' he said, referring to market activity. ''There is very little correlation between longer trading hours and volumes.''

Shares in Hong Kong Exchanges have lost 9.5 per cent in 2010, more than the 3.5 per cent drop by the benchmark Hang Seng Index.

Extending trading hours ''would make a lot of sense in bringing Hong Kong in line with the majority of global markets'', Mr Lun said. ''I'd counter-propose a 1½-hour lunch. Even though our liquid lunches will be gone, there'll at least be semi-solid lunches.''

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Hong Kong stockbrokers may lose their traditional two-hour lunch break

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