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HK financial industry shrugs off pro-democracy protests
[HONG KONG] Hong Kong's benchmark index posted its biggest daily gain in more than a month on Monday, as pro-democracy activists scaled down protests, allowing civil servants to pass through barricades unimpeded, on their way to work at the main government offices. Some banks reopened branches that they had closed during the the mass protests over the past week.
The benchmark Hang Seng Index rose 1.1 per cent on Monday, the most since Sept 3. The gauge sank 2.6 per cent last week, the steepest drop since March. The Hong Kong dollar gained 0.06 per cent, the biggest two-day increase since March.
Hong Kong's pro-democracy protests have mainly meant business as usual for the city's banks, brokerages and financial firms. Hong Kong Exchanges & Clearing Ltd has left its hours unchanged throughout the crisis, while some staff in the industry have worked from home and some bank branches have been temporarily closed in protest hot-spots.
The World Bank said the protests were hurting Hong Kong's economy, but the impact on China was limited at this point. "What we anticipate is obviously a greater impact on the Hong Kong SAR (Special Administrative Region), so slower growth in 2014 than was being anticipated earlier," World Bank East Asia and Pacific Chief Economist Sudhir Shetty said at a media briefing on Monday on the latest East Asia Pacific Economic Update. "But at this stage our best estimates ... are that there isn't as yet significant spillover to the broader Chinese economy."
The Hong Kong Monetary Authority has asked banks to resume services as soon as possible, it said in a statement. Seven bank branches remain closed, it added. Almost 50 branches were shuttered at the peak of the protests last week.
CLSA Ltd, located in a tower directly behind the main protest area in the Admiralty district, didn't have to activate its contingency plans even when crowds of demonstrators swelled into the hundreds of thousands. In Citibank Plaza, less than a kilometre away, Citigroup Inc saw no "meaningful impact". Some financial services firms, such as Citigroup, activated contingency plans, letting staff work from home on Sept 29. CLSA has a back-up office that it can use if necessary.
Brokers for UOB-Kay Hian Holdings Ltd were able to make it into the firm's office in Central, saving it from having to use its secondary office in the Yau Ma Tei district, according to Steven Leung, its director for institutional sales. Yau Ma Tei is three metro stops north of Admiralty on the other side of Victoria Harbour.
Citigroup closed four of its 45 branches for "a few days" and asked some staff members to work from home on Sept 29, James Griffiths, a spokesman for the New York-based bank, said. Now, just its Mong Kok branch is temporarily closed, he revealed. Disruption "has been limited", Mr Griffiths added. "Something like 95 per cent of transactions happen online so it's not really had a meaningful impact."
Standard Chartered plc's services were operating normally on Monday and disruptions from the protests had been minimal, Gabriel Kwan, a Hong Kong-based spokeswoman, said. The lender has reopened all branches after earlier closing outlets in Admiralty, Causeway Bay and Mong Kok.
HSBC Holdings plc's building in Mong Kok, the district where a mob assaulted protesters on Oct 3, remained closed to the public on Monday, Gareth Hewett, a spokesman in Hong Kong, said.
"Right now it appears the blockades should dissipate in the next few days," said Cliff Tan, the Hong Kong-based East Asia head of research for Mitsubishi UFJ, whose office is located in the Central Business District. "The markets are fine on Monday."
Numbers of protesters are thinning as student leaders begin talks with the government on their calls for freer elections. Dozens of protesters maintained a vigil outside the office of Hong Kong Chief Executive Leung Chun-ying on Monday, while hundreds more were scattered along a blocked highway on the other side of the government complex. Protesters manned barricades on Queensway, in front of Pacific Place, where CLSA is based.- Reuters, Bloomberg