HK stocks plunge amid un­rest

Ex­perts warn of broader, last­ing eco­nomic dam­age

Global Times US Edition - - BIZUPDATE - By Xie Jun and Wang Yi

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.

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