HONG KONG, (Reuters) – A “fragile” geopolitical climate has slowed trading volumes on Hong Kong’s stock exchange, as well as initial public offerings, and presented challenges to its commodities business, particularly nickel, said the CEO of the bourse on Tuesday.

China-U.S. tensions are exacerbated in the Russia-Ukraine war. Concerns about the tightening regulatory climate for platform and tech companies and persistent global inflation have “weighed heavily” on markets, said Nicolas Aguzin (chief executive of Hong Kong Exchanges and Clearing).

Aguzin said, during an HKEX-sponsored event, that “we’re acutely aware” of some difficulties in our commodity businesses, including nickel, following the Russia-Ukraine conflict.

HKEX’s London Metals Exchange subsidiary stopped trading and cancelled all nickel trades. This was due to volatile prices that doubled to over $100,000 per tonne in just hours. Traders were left fuming after a series of technical problems occurred following trading’s return.

Aguzin, who reiterated that HKEX’s strategy was to connect Chinese and global capital markets at Tuesday’s event, said that HKEX was currently working on various initiatives to improve the vibrancy of the markets.

He acknowledged, however that Hong Kong’s population was negatively affecting the financial markets.

He said, “We are seeing restricted inflows and an increasing amount of people leaving the city. This has led to a talent battle in the financial sector.”

Hong Kong is easing its stringent anti COVID regulations. This was a move that business lobby groups warned would lead to an exodus in professionals and undermine the environment for business.

However, restrictions on inbound travel and quarantine remain in effect.