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Hong Kong protests knock investor confidence in city’s shares
[HONG KONG] Hong Kong stocks were poised for their worst drop in six weeks on Monday on concern the city’s prolonged protests will take a toll on the local economy.
The MSCI Hong Kong Index dropped 1.7 per cent, its fourth day of losses, on volume that already exceeded the daily average of the past three months. Developers were among the biggest decliners, with Link REIT, Wharf Real Estate Investment Co Ltd and New World Development Company Ltd down more than 3 per cent. MTR Corp., which operates the city’s railway system, lost 2.9 per cent.
Hong Kong’s financial markets have been relatively resilient to the unrest, with the MSCI measure still up 12 per cent this year. But with an eighth straight week of protests keeping local shoppers away from stores and overseas visitors canceling their trips, global luxury retailers have been feeling the impact. The pain is likely to spread to the city’s retail landlords.
“Compared with the past political events, this round is the worst in Hong Kong so far,” said Shaun Tan, UOB Kay Hian analyst in Hong Kong. “It’s still very difficult to forecast the long-term impact. There will be lots of pressure on the retail sales given the recent political events. Sales of large residential units can also be coming down due to that.”
Police deployed tear gas and rubber bullets throughout downtown Hong Kong Sunday to clear thousands of protesters. The Hong Kong and Macau Affairs Office, which reports to China’s cabinet, will hold a news briefing on the unrest at 3pm local time on Monday.