Hong Kong halts derivatives trading after technical problems Hong Kongs exchange operator halted derivatives trading because of technical issues for the first time in its history, deepening losses in the local stock market at a time of heightened sensitivity about the citys status as Asias premier financial hub. The move to suspend trading in the afternoon and after-hours sessions came after Hong Kong Exchanges & Clearing Ltd. experienced connectivity issues with its derivatives platform on Thursday morning. The exchanges websites also faced intermittent access problems. The firm said the problem was caused by a software issue in the vendor-supplied trading system. The issues hampered trading in the morning just as Hong Kong Chief Executive Carrie Lam gave a press conference about the demonstrations that have rocked the former British colony for three months, during which she resisted protesters calls to immediately meet the rest of their demands. The MSCI Hong Kong Index fell 1%, extending declines after the halt in derivatives trading. It had rallied the most since 2011 on Wednesday as Lam formally withdrew a controversial extradition bill. Ive been doing this since 2003 and I dont recall anything like this, said Martin Wong, head of exchange-traded solutions in Asia Pacific for the equity derivatives team at BNP Paribas SA. Because the futures market is closed, there is no efficient way to hedge. Assignment File 15 Trading in September Hang Seng Index futures totaled 60,070 contracts before the suspension, down 80% from the previous day. Volume in call and put options linked to the Hang Seng Index was less than 5% of the 20-day average, according to data compiled by Bloomberg. Its very troublesome for investors as we cant hedge, said Steven Leung, executive director at UOB Kay Hian (Hong Kong) Ltd. If something unexpected happened this afternoon, basically we are unable to respond effectively. Source: Fung, M, Yu, J and Ying, M (2019) Hong Kong halts derivatives trading after technical problems, Bloomberg, September 5. Answer the following question.

Question 1 (50 marks) Critically appraise the above news article and submit a written report. The report should focus on the listed firm(s) with publicly available financial information, and should relate to the topic on derivatives and risk management, or mergers, divestitures and corporate restructuring. Write no more than 500 words (please provide a word count). The report should cover theory understanding, concept application, analysis, research efforts, conclusion and references.