Date
22 July 2017
The stock market will remain stable despite the rejection of the government's political reform package, says HKEx CEO Charles Li. Photo: HKEJ
The stock market will remain stable despite the rejection of the government's political reform package, says HKEx CEO Charles Li. Photo: HKEJ

Stocks, property seen unaffected by electoral reform bill veto

The setback suffered by the Hong Kong government on the electoral reform bill is unlikely to have any material impact on the local stock and property markets, experts say.

Investor sentiment will not be affected, and the stock market will remain stable, said Charles Li, chief executive of Hong Kong Exchanges and Clearing Ltd. (00388.HK), which operates the local stock exchange.  

Li also dismissed concerns that the political developments could affect the planned launch of the Shenzhen-Hong Kong Stock Connect program, the Hong Kong Economic Journal reported.

Hong Kong’s lawmakers on Thursday vetoed a Beijing-backed plan on the method to choose Hong Kong’s next leader in 2017.

The move was widely expected, but still prompted worries in some quarters that the central government could now seek to punish Hong Kong in some way.

Vincent Chan, Hong Kong-based managing director of Credit Suisse, said the stock market had already factored in Thursday’s negative Legco vote, and that the result will be taken in stride.

The market’s prospects will depend more on the performance of China’s A-shares, rather than the failure of the political reform package, he said.

Raymond Yeung, senior economist with Australia and New Zealand Banking Group, said the electoral reform bill’s failure will not have any impact on Hong Kong’s financial system, including the dollar peg regime.

But concerns may surface about the stability of the political and commercial environment, he said.

Sammy Po Siu-ming, chief executive of Midland Realty’s residential department, said the political developments will have limited impact on the property market.

However, some short-term investors and speculators may take a cautious stance and move to the sidelines for a while, he said.

Translation by Vey Wong

[Chinese version中文版]

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