Wall Street Journal
Noontime Cessation in Trading Is Sacred; Threat to Dim Sum and Business Cha
HONG KONG—In the city that created the dim sum bond, where food and money are two overriding passions, the biggest battle in the financial community isn’t about job cuts or billion-dollar IPOs. It’s about lunch.
The spiritual leader of the dispute is a tiny 80-year-old stockbroker wearing a black fur coat and carrying a leopard print handbag. She says she is fighting against the city’s wealthy, entrenched elite. At issue is the length of the lunch hour at the Hong Kong Stock Exchange. The exchange, the world’s leader in IPOs the past three years, wants to reduce its lunchtime trading break from 90 minutes to one hour. Until last year, the break lasted two hours. « Lunch is a habit of Chinese people, » says the protest’s matriarch, Choi Chen Po-sum. « Foreigners are different. They can have a big breakfast and forgo lunch. »
No major Western stock exchange has a midday break. While some Asian exchanges still cling to the tradition, Singapore’s stock exchange scrapped lunch last year, and Tokyo trimmed the halt to one hour from 90 minutes. The New York Stock Exchange gave up its midday trading break in 1871, four years after the first stock ticker brought live prices to investors. A London Stock Exchange spokesman said he could « find no record of a formal lunch break in modern times. » But, given that there has been trading in London since 1698, « there may have been at some point, but it would be very difficult to find that out. »
For brokers in Hong Kong, lunch is sacrosanct. « Lunch also isn’t just for eating, » Mrs. Choi said. « It’s also when Hong Kong brokers go out and find clients. That’s the only way they can get new business and make commissions. » Hong Kong stockbroker Choi Chen Po-sum, the protest leader Mrs. Choi, who is the Life Honorary President of the Institute of Securities Dealers, was one of Hong Kong’s first women brokers when she started in the 1970s. « I wanted to work but didn’t want to do anything that was too physically taxing, nor did I have any professional qualifications, » she says. Her opponent in the battle over the lunch hour is Charles Li, chief executive of Hong Kong Exchanges & Clearing Ltd., who has been pushing to modernize the exchange with new technology and products. The former journalist understands that change can be bitter but argues that the city can’t afford such luxuries in an increasingly competitive world. The exchange is urging brokerages to better manage their resources, perhaps by rotating employees’ lunch breaks to cope with the new schedule.
The feud highlights a split in Hong Kong’s financial community. While the world’s biggest banks occupy dazzling skyscrapers in the city’s Central District, many stockbrokers work in storefront offices in crowded neighborhoods where their often elderly clients spend the day aggressively trading stocks and socializing. Brokers argue that the exchange’s reforms will only benefit the big banks’ brokers and that cutting lunch means they can’t spend time with their fast-trading clients who want to discuss the morning trading session and strategize for the afternoon. « Now that they don’t have this break in the day, even the clients are unhappy, » said Ruann Cheung, 48, who has been a broker for more than 20 years. « Also, does the stock exchange expect investors not to eat lunch? »
The fight spilled out into the street last week when brokers marched on the exchange. One protester held an iPad aloft with a picture of Mr. Li with his face crossed out, and others derided him as the dictator of Hong Kong’s monopoly exchange. Some smashed porcelain rice bowls to symbolize the threats to their livelihood.
Ms. Cheung and a few of her fellow brokers from Lippo Securities Ltd. held placards that said, « To HKEx: You want us to trade till we drop; we want you to drop before we trade! » They said one of their clients came up with the slogan and encouraged them to protest.
The protest began across the street from the Asia headquarters of HSBC, where a group of Occupy Hong Kong protesters—an offshoot of Occupy Wall Street—have been camped for months.
The two groups remained unaffiliated, but Iris Yau, a high-school student who said she spends four to five nights a week sleeping at Occupy Hong Kong, sympathized with the brokers. « Just because they are rich, it doesn’t mean they agree to being exploited, » she said.
Among the marchers protesting the stock exchange were restaurant workers including Jacky Choi, a deputy manager at Treasure Lake Golden Banquet, a dim sum hall that serves hundreds of dumplings to brokers during their lunch break. He said revenue at lunch fell by as much as one-third after the lunch hour was shortened. The brokers in Hong Kong do have one advantage over their brethren abroad—they work sitting down. Still some say working without a break in trading will be too much. « Our work is mainly using our brain. After a long time of working, our brain will be stuck, » said Joseph Wong, a broker at Delta Asia Securities Ltd.
The marchers reached the stock exchange and chanted for Mr. Li to come out. He emerged and stood awkwardly with several other exchange executives in the middle of the crowd to accept their letter of protest. Some brokers say that even if the lunch intermission is shortened, brokers won’t trade during the new hours. Last year the break, which had run from noon to 2 p.m., was cut by 30 minutes, but trading volume hasn’t increased.
« The fact is, no trading is happening from 1:30 to 2…we are sitting around doing nothing, » said Jojo Choy, chairman of the Institute of Securities Dealers. « There is no market efficiency at all. »