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Shanghai wears a deserted look as the city of 25 million is under a lockdown to contain the spread of Covid-19. Photo: Bloomberg

Shanghai lockdown: traders from Standard Chartered to Citigroup keep markets ticking while stuck at home

  • Brokers at large investment banks are executing trades remotely from home, with IT staff manning systems in the offices to keep the operations going smoothly
  • Stock, forex and bond trading volumes in Shanghai have fluctuated since the rolling lockdown was put in place

Banks in Shanghai have undertaken the unusual step of allowing traders of their treasury operations in a range of asset classes from fixed-income financial products to foreign exchange to trade from home, taking an unprecedented measure to keep China’s financial centre ticking while observing a stringent citywide lockdown amid a Covid-19 outbreak.

“Our business is operating as usual as we continue to support our clients through this pandemic,” Ji Yang, executive vice-president and head of global markets for China at Citigroup, said in an email.

“We have ensured that colleagues who work from home are well equipped to do so. Some colleagues have volunteered to stay behind in the office so that we can maintain the efficiency our clients are accustomed to.”

The city of 25 million people remains locked down after more than a week of what began as a rolling shutdown that was supposed to end on April 5. Shanghai, the new epicentre of China’s latest coronavirus outbreak, saw cases rise for the seventh straight day to a record 21,222 cases on Thursday, taking the overall figure to 131,000 since the current outbreak started on March 1.

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“We only require a handful of IT people to stay in the office to solve any IT problems,” said a Standard Chartered official, who did not want to be named. “Most other staff, including traders, are working from home to keep trading going as usual by remote.”

A trader working for a large international bank in China’s financial hub said not much had changed for him as he was operating his work computer from home, but missed his office workstation with its many computer screens.

It’s almost the same as working from the office, although the quality of hardware and working atmosphere are not as good as that of the office, said the trader, who did not want to be named.

Trading volume on the mainland’s stock exchanges has fluctuated since the rolling lockdown was implemented late last month. However, volumes have fallen this week since the market reopened on Wednesday following the tomb-sweeping holiday.

Turnover in Shanghai fell to 398.1 billion yuan (US$62.6 billion) on Thursday, from 433.6 billion yuan on Wednesday. On Friday, the volume dipped further to 389.3 billion yuan.

Shanghai, which is also a major yuan trading hub, has seen volumes slump in recent days. The volume on Friday was US$15.8 billion, 43 per cent lower than April 1.

Bond trading volumes have also fluctuated. China’s total bond market settlement stood at 2.68 trillion yuan on March 31, 24 per cent lower than the previous day just before the lockdown and long public holiday. It bounced back 170 per cent to 4.8 trillion yuan on April 6, according to data from China Central Depository & Clearing.

The impact of lockdown on the market is big as not only traders of financial institutions but also staff of brokerages are quarantining at home, the trader said.

Team members were unable to collaborate efficiently, and communication with external institutions has been affected, he added.

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He said regulators should lead and motivate financial institutions to better deal with such unforeseen circumstances, establish a better work-from-home mechanism and improve the electronic trading system to reduce the impact on the market.

The Shanghai Stock Exchange, however, has assigned hundreds of staff who are working in a “closed loop” to ensure smooth trading while quarantine requirements are in place.

The biggest of the mainland’s three stock exchanges, based in Pudong’s Lujiazui finance and trade zone, said it would continue vetting initial public offering applicants seeking to list on the technology-heavy Star Market.

It also said it would make better use of online communication tools with issuers, and hold virtual ceremonies for newly listed companies.

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