Hong Kong leader Carrie Lam to formally withdraw extradition bill, says SCMP; stocks soar

[HONG KONG] Hong Kong's embattled leader, Carrie Lam, plans to formally withdraw a controversial bill that would have allowed extraditions to China, the South China Morning Post reported on Wednesday, citing unidentified sources.

The formal withdrawal of the bill is one of the major demands of pro-democracy protesters who have demonstrated against the government for almost three months. Ms Lam has called a 4pm meeting with pro-establishment politicians, the SCMP said.

Her move follows a weekend that saw some of the fiercest clashes between protesters and riot police. Demonstrators have lobbed petrol bombs and set bonfires in the streets, while police officers fired tear gas, rubber bullets and pepper spray, making more than 1,100 arrests since early June.

Hong Kong stocks soared, led by property developers, after news reports said Lam will formally withdraw the extradition bill that's sparked months of protests. The benchmark Hang Seng Index surged as much as 3.9 per cent before paring gains to 3.1 per cent at 2:16pm local time.

The turmoil that followed ms Lam's attempt to introduce the ill-fated bill - including mass marches that drew over 1 million people and protests that shut the city's busy airport - have turned into the biggest crisis for Beijing's rule over the former British colony since it returned to Chinese rule in 1997. Aggressive police tactics, threats by Beijing to deploy the People's Liberation Army and sweeping arrest of pro-democracy figures have raised fears about Hong Kong's autonomy and political freedom and drawn international condemnation.

Although Ms Lam had previously suspended the bill - saying it was "dead" - her move did little to appease demonstrators, who continued protesting and expanded their demands to include calls for greater democratic freedom. Without the bill's formal withdrawal, it could be reintroduced in a matter of days.

BLOOMBERG