Hang Seng (HKD) Surges with Carrie Lam Set to Withdraw Extradition Bill
Hong Kong Analysis and Talking Points
- Hang Seng Surges on Possible Extradition Bill Withdrawal
- Hong Kong Economic Damage Already Felt by Protests
Hang Seng Surges on Possible Extradition Bill Withdrawal
Hong Kong assets surged during the Asian trading session with the Hang Seng posting its strongest daily performance (+3.9%) since November 2018 after reports circulated that Hong Kong’s Chief Executive Carrie Lam was set to formally withdraw the controversial extradition bill, which had sparked 3-months of protests. Consequently, following these reports, the Hang Seng is trading at a 1-month high, albeit, still down as much as 8% since the protests began, while HK property developers as well as European luxury names have also been buoyed. The focus now is whether this latest announcement will satisfy protesters.
Hong Kong Economic Damage Already Felt by Protests
The Hong Kong economy have been gripped by protests that have ran over the past 13 weeks. In turn, the impact of this has already been felt within the economy with the latest Hong Kong PMI showing its deepest contraction the height of the global financial crisis. Consequently, expectations are for a contraction in growth throughout Q3, while IHS Markit also note that economy is expected to contract at an annual rate of 4-4.5%.
--- Written by Justin McQueen, Market Analyst
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