You are here
Hong Kong shares rally after Lam said to 'withdraw' controversial bill
[SINGAPORE] Hong Kong stocks jumped, led by property developers, after reports Chief Executive Carrie Lam will formally withdraw the extradition bill that’s sparked months of protests.
The MSCI Hong Kong Index surged 4.6 per cent, poised for its biggest gain since October 2011. Wharf Real Estate Investment Co and New World Development Co rallied at least 8 per cent. The Hong Kong dollar gained as much as 0.08 per cent. The Hang Seng Index was up 3.5 per cent.
Ms Lam plans to formally withdraw the bill, the South China Morning Post reported on Wednesday, citing unidentified sources. Lam has called for a meeting with pro-establishment politicians at her residence at 4 p.m. local time, HK01 news website reported, without saying where it got the information.
A spokeswoman for Ms Lam’s office wasn’t immediately available to comment by phone or email on Wednesday afternoon.
The MSCI Hong Kong Index tumbled 8.6 per cent last month as increasingly violent protests and an economic slowdown darkened the outlook for the city’s companies.
"The withdrawal is sign of an inflection point in the 13-week long crisis," said Justin Tang, head of Asian research at United First Partners. "Retail and property stock investors are signalling their optimism and putting their money where it matters."
The Hang Seng Properties Index rose 6.4 per cent. The gauge had tumbled more 20 per cent since its April high through Tuesday. Sun Hung Kai Properties Ltd. headed for its best gain since 2009.
MTR Corp, which has seen a number of stations deliberately damaged in the protests, climbed 5.7 per cent.
The rebound may be short-lived, according to Gary Ching, vice president of the research, wealth management department at Guosen Securities (HK).
"If the reality turns out to be a let-down, the disappointment may suppress shares even further," Mr Ching said. "It’s unlikely that retracting the bill will be enough to placate the unrest - this concession by the government may instead motivate protesters to do more to get their other demands met. Even if the bill is retracted as the market expects, we are a long way from wrapping this up. "