HK stocks plunge amid unrest
Experts warn of broader, lasting economic damage
Hong Kong’s equity markets plummeted on Monday as civil unrest raged in the region and showed signs of escalation. One stock expert warned that Hong Kong’s economy will be “trapped in a vicious circle” if the situation worsens.
The Hang Seng Index slipped 2.85 percent to 26,151 points on Monday, the fourth consecutive day of losses. Nearly 60 companies listed on the Hong Kong bourse fell by more than 10 percent, with energy shares leading the decline.
“The Hong Kong stock market’s downturn was largely caused by the chaotic and increasingly violent protests in Hong Kong in the past two months,” Yang Delong, chief economist at Shenzhen-based First Seafront Fund Management Co, told the Global Times on Monday.
Li Daxiao, chief economist at Shenzhen-based Yingda Securities, said that the plunge in Hong Kong’s stock market was “obviously abnormal.” “It’s quite a departure from Hong Kong’s economic fundamentals,” Li said.
The experts warned that Hong Kong’s economy might weaken further if the disruptions go on. “If violent protesters in Hong Kong continue their arbitrary behavior and ruin social order, the city’s economy, which largely relies on the financial and trade sectors, will be trapped in a vicious circle, and residents’ living standard will be hurt,” Yang said.
Li also warned that if the violent Hong Kong protesters continue to hurt society, all support from the Chinese mainland would be “in vain” and Hong Kong’s financial and economical status would be lost.
The city was again plunged into chaos over the weekend as thousands of protesters occupied a major downtown shopping district. The skirmishes between protesters and local police also intensified.
Hong Kong Chief Executive Carrie Lam said Monday during a press conference that Hong Kong, which is “full of bullying and maltreatment,” is on the verge of a “very dangerous situation.”
The months-long protests across Hong Kong have also negatively affected the city’s economy, said Paul Chan Mo-po, Hong Kong’s financial secretary.
Experts have noted that Hong Kong’s economy is quite reliant upon support from the mainland, and Hong Kong must strengthen cooperation with the mainland for its economic superiority to manifest further.