After boycotting the city’s pro-democracy media, HSBC has warned investors to sell stock in Hong Kong in light of the hypothetical ‘Occupy Central’ sit-in.
Yesterday, the British bank, which has extensive interests in the mainland, downgraded Hong Kong in its “Global Equity Insights Quarterly” to ‘underweight’.
There remains no evidence the economy would be affected by the, as yet unconfirmed, pro-democracy protest. During the July 1st rally, the Hang Seng index rose 1.6%, its biggest jump since early May. The Hong Kong Stock Exchange stated earlier this year that it expects any acts of civil disobedience to have a minimal impact on trade.
Fan Cheuk-wan, managing director for Asia Pacific at Credit Suisse, said that she did not believe the movement would have a huge impact on the financial system, according to the SCMP. Instead, she cited concerns over the city’s judicial independence.
HSBC modified its report after widespread criticism, listing other reasons – such as the housing market – for investors to pull out of Hong Kong. The warnings are in contrast to their stance on Thailand – despite unrest and a military coup, HSBC predicted a “limited” impact for investors.
Meanwhile, Hong Kong archbishop Paul Kwong has teased protesters who attended the July 1st overnight sit-in for democracy. He suggested activists ought “bring their domestic helpers along“, after it emerged police prevented protesters from accessing bathrooms, food and water. Criticising Hong Kongers for exhibiting a “herd mentality“, he encouraged citizens to follow the example of Jesus and ‘be silent’. Citing Jesus Christ, an outspoken Palestinian carpenter and activist, Kwong said that “Things are not that bad in Hong Kong. We should find peace of mind.”
Last month, the normally apolitical business chambers of Hong Kong, Bahrain, Italy, India and Canada published a statement condemning the proposed demonstration. The Canadian chamber’s chairman John Witt will not comment on their stance, though the Canadian consulate was forced to distance itself from the business body. The chamber is holding a social mixer on Thursday.
Consultancy groups Ernst & Young, KPMG, Deloitte Touche Tohmatsu and PricewaterhouseCoopers also published a similar advertisement last month. And a women’s group, which lists CY Leung’s wife as its honorary patron, published an advert warning Hong Kongers to ‘think of the children’ in light of the pro-democracy demonstration. The HK Girl Guides, a signatory, have also refused to comment.
Read Hong Wrong’s Guide to Escaping HSBC.