COVID in China hit financial center in Shanghai
2022.12.19 01:46
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COVID in China hit financial center in Shanghai
Budrigannews.com – With illness and absence thinning already light trade and forcing regulators to cancel a weekly meeting vetting public share sales, COVID-19 is rapidly spreading through Beijing’s trading floors and Shanghai’s financial hub.
Plans developed to deal with previous COVID crises have been revived by many banks and asset managers, adding to the unpredictability of currency and stock markets, where a rocky exit from strict health restrictions is clouding the outlook.
Since the country abruptly ended its zero-COVID policy earlier this month, mass testing was stopped, and official data no longer accurately reflect new case numbers. More than half of the employees at several large asset managers and banks, according to internal surveys, have tested positive for the virus in Beijing, the epicenter of the outbreak.
A fund manager at PICC Asset Management said, “I would say more than half of colleagues in Beijing are sick, compared to 5%-10% in Shanghai,” but he declined to provide his name because he is not permitted to speak with the media.
The average daily yuan/dollar trading volume in China’s interbank market dropped to about $20 billion last week, the lowest level since April 2022, when Shanghai was put on a painful lockdown for two months to prevent the virus from spreading.
The volume of stock trading also fell last week. The average number of shares traded over the past three years, approximately 143 billion, was slightly lower than the weekly total of 139 billion for the.
A trader at a state-owned lender, who spoke on condition of anonymity because they are not permitted to discuss such matters with the media, stated that “trading volume would naturally fall” because the majority of currency traders in Beijing are not present at their offices.
Any employee who lives with people who have a fever or have tested positive has been asked not to come into the office by the bank. The trader stated, “Remote trading does not solve the problem that you are sick in bed and have to care for your family.”
Initial public offerings (IPOs) are also affected by the pandemic, as evidenced by the China Securities Regulatory Commission’s decision to postpone their weekly meeting last week. The possibility of holding the meeting again this week is unknown.
Additionally, a news conference scheduled for November’s economic data was postponed by the National Bureau of Statistics.
Certainly, long stretches of severe Coronavirus rules have left a great deal of organizations very much positioned to deal with interruption.
On condition of anonymity, a banker at Shanghai-based Haitong Securities stated, “We take turns doing the job if one banker is on sick leave because we travel a lot and we have several people working on one IPO project.”
Nevertheless, as the virus begins to spread widely, the situation that lies ahead is unlike any other.
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“We are doing everything we can, as this wave of infections and the situation should be the worst since first half of 2020,” stated a senior trader at a Chinese bank in Shanghai. “We have a backup and recovery disaster plan and revived backup offices in two locations just like we did during Shanghai lockdown in April and May.”
