In any given year, there are certain times when you can almost guarantee that activity will be quiet on the Hong Kong stock exchange. Things tend to be slow in the run-up to Christmas and the just after New Year, while the days just prior to and after Chinese New Year are also traditionally slow for trading.
Now it seems you can add the time around the Hong Kong Sevens to the list. It appears that some, though by no means all, investors and traders are inclined to ease off during Sevens week.
The most likely explanation for the lull is that many of them attend the CSFB Asian Investment Conference, held just before the rugby kicks off on Friday.
Whatever the reason, there can be no arguing with the figures. Going by market turnover, on the record day for the HKSE in the last 12 months û 19 April 2001 û around HK$17.75 billion ($2.275 billion) worth of trades were completed. The daily average in the last year has been HK$7.55 million, yet for the first three trading days this week the average has been HK$5.75 million, a 24% fall.
A similar fall was seen during the run up to the 2001 HK Sevens. Although the average daily volumes traded that week was just shy of the daily average for the year at HK$7.472 billion, the HKSE was a lot busier in the first quarter last year. For example, in the week before the CSFB conference, the daily average was HK$9.5 billion; two weeks later it was close to HK$10 billion.
Perhaps most interestingly though, is that the Monday after last years Sevens was unusually quiet for both for the Hang Seng Index and the HKSE as a whole. The volume of Hang Seng trades that day was only HK$2.85 billion, compared to a daily average HK$4.2 billion in the past year, while trades for the HKSE amounted to HK$6.9 billion on the Monday, yet rose to almost HK$9 billion by the Friday of that week.
Is there any reasonable explanation for the discrepancy? Could it be that some traders and investors overindulged in the, ahem, liquid refreshments available during Sevens weekend, rendering them ineffective for duty on Monday? If so, will they make the same "mistake" this year?