MARKET SELL-OFF HITS HONG KONG OVER BEIJING’S NAT’L SECURITY LAW
Real estate and financial firms got a huge battering at the Hong Kong stock market as sell offs surged after Beijing proposed a national security law that threatens the autonomy of the former British Crown Colony, which was guaranteed for 50 years under a deal cut by Britain and China in 1997.
In a report, the Agence France Presse (AFP) said on May 22, 2020 that “investors fled for the hills with many worried about Beijing’s increasing influence in the semi-autonomous finance hub and what that could mean for doing business there.” The proposed security law before the annual National People’s Congress in Beijing strengthens “enforcement mechanisms” in Hong Kong, which was rocked last year by seven months of massive and sometimes violent pro-democracy protests that crippled the city, and could unleash battalions of state police to control the territory.
The Hang Seng Index fell more than four percent on Friday morning. Sun Hung Kai Properties lost 7.1 percent and New World Development dropped 8.1 percent, while Wharf Real Estate Investment shed 8.7 percent. Swire Pacific was seven percent off and Hang Lung Properties was more than five percent lower.
Market heavyweight HSBC lost 4.7 percent and BOC Hong Kong shed nearly six percent, while insurance giant AIA was down 6.2 percent and China Life dropped 5.8 percent. Subway operator MTR Corp., which was battered during the protests as its stations were targeted by demonstrators, dived 8.8 percent. The Hong Kong dollar, which has been at the strongest end of its trading band with the US dollar for several weeks, also dropped as dealers began selling.