Date
23 November 2017
HSBC says the Occupy Central civil disobedience movement “could sour relations with the mainland”, but in an updated version of the report, downplays the impact of the protests. Photos: Bloomberg, HKEJ
HSBC says the Occupy Central civil disobedience movement “could sour relations with the mainland”, but in an updated version of the report, downplays the impact of the protests. Photos: Bloomberg, HKEJ

HSBC cuts HK stock market outlook amid Occupy Central fears

HSBC has downgraded the prospects of Hong Kong’s stock market amid concerns over the impact of the Occupy Central civil disobedience movement, Ming Pao Daily reported on Tuesday.

The bank suggested that investors cut holdings in Hong Kong shares, saying planned protest actions by the group could sour relations with the mainland and hurt the economy.

“We reduce Hong Kong to underweight on concerns about negative news flow [regarding the Occupy Central],” HSBC analysts said in an equity investment strategy report for the third quarter released on Monday.

However, about 10 hours later, the bank issued an updated report, in which it downplays the impact of Occupy Central movement, citing four other reasons that could dampen the market, including a weakening property market, decelerated growth of mainland visitors under the solo travel scheme, possible rate increse by the US Federal Reserve, and corporates’ bleak profitability outlook. It deleted the part that said Occupy Central “could sour relations with the mainland”, the newspaper said.

Occupy Central co-organizer Chan Kin-man was quoted as saying that he believed the sit-in would cause only a temporary disturbance, and that in the long run, the pursuit of democracy would create a favorable investment environment and benefit the city’s economy.

Fan Cheuk-wan, Asia Pacific managing director for Credit Suisse Private Banking and Wealth Management, said Occupy Central would not have a huge impact on the financial system as the industry had taken precautions.

Foreign investors are more concerned about whether the central government is adjusting the “one country, two systems” policy on Hong Kong and how the government would respond to people’s fears that the city might lose its judicial independence, the report said.

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