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Hong Kong stocks sink as violent unrest hits city
HONG KONG, Nov 13, 2019 (BSS/AFP) – Hong Kong stocks plunged Wednesday as
investors braced for further unrest following days of violent protests that
have almost ground parts of the city to a halt, with police warning it was
close to “total collapse”.
After more than five months of standoffs, the demonstrations appear to
have entered a much more violent phase.
And with the fighting showing no sign of easing, there are increasing
worries about the outlook for a city known for its safety and ease of doing
business, with police on Tuesday saying the rule of law was on “the brink of
total collapse”.
There are even whispers that Alibaba’s plans for a share sale worth up to
$15 billion in the city — which reports said Wednesday were approved by
regulators — could be affected. The firm had already called off a summer
listing owing to the protests and the China-US trade war.
The Hang Seng index sank 1.82 percent, or 493.82 points, to 26,571.46.
The benchmark Shanghai Composite Index ended 0.33 percent, or 9.58 points
lower, at 2,914.82, while the Shenzhen Composite Index, which tracks stocks
on China’s second exchange, was marginally higher, adding 0.11 points to
1,614.30.
While the China-US trade war is a major drag, the demonstrations have
helped hammer the local economy which fell into recession in the third
quarter for the first time in 10 years at the height of the global financial
crisis.
The tourism industry has also been battered, with arrivals plunging by
half, while a key measure of business confidence sank to its lowest level
since 2008.
“The situation in Hong Kong has taken a decidedly dark turn this week,
with the violence and economic disruption seemingly gathering pace,” said
OANDA senior market analyst Jeffrey Halley, adding that nervousness about
Hong Kong was weighing on other Asian markets.
“The worries about direct intervention by Beijing and its implications for
the region, has ratcheted materially higher.”
Property firms were among the worst affected with New World Development
down nearly five percent and Henderson Land falling almost three percent.
Sino Land and Swire Properties both dived three percent.
Casino operators in Macau were also feeling the pinch. Sands China lost
2.8 percent, while Galaxy Entertainment and Wynn Macau were both down 1.6
percent.
Hong Kong Exchanges and Clearing was off more than two percent as trading
volumes tumble.
“There’s not enough certainty,” Airy Lau, at Fair Capital Management, told
Bloomberg News, which said he had pulled his investments from the city’s
exchange by August.
“We’ll see stocks fall a little here, rise a little there. I don’t think
investors expect a resolution to the protests any time soon.”
BSS/AFP/RY/1618 hrs