HSBC report downgrades Hong Kong over protests

Demonstration was a powerful display of opposition to China’s efforts to control who will be Hong Kong’s chief executive after 2017

Pro-democracy protest: thousands gather to march in downtown Hong Kong to push for greater democracy earlier this month. Photograph: ap photo/kin cheung

Pro-democracy protest: thousands gather to march in downtown Hong Kong to push for greater democracy earlier this month. Photograph: ap photo/kin cheung

 

Over half a million people took to the streets of downtown Hong Kong earlier this month, on the 17th anniversary of the territory’s reversion to Chinese rule, calling for more democracy and showing lingering unease about central rule from Beijing in the former crown colony.

The demonstration was a powerful display of opposition to China’s efforts to control who will be Hong Kong’s chief executive after 2017, when the post is supposed to be chosen by residents of China’s richest city.

The show of dissent irked the central government in Beijing, but it also rang alarm bells among analysts at HSBC, which before it became a British bank was originally called the Hong Kong and Shanghai Banking Corporation and was founded in the territory in March 1865.

“We reduce Hong Kong to underweight on concerns about negative news flow. “Occupy Central”, a campaign for greater democracy, could sour relations with China and may hurt the economy,” said the research note.

The note gave no further reasons for cutting the rating. There was an outraged reaction on Twitter – which is allowed in Hong Kong but not in China – and other social media, prompting HSBC to release an updated version which said: “We reduce Hong Kong to “underweight” on the risk of weak residential real estate prices, the slowdown in mainland tourist arrivals, the market’s link to US interest rates (the Federal Reserve could raise rates next year) and weak earnings momentum.”

“We also note recent concerns about negative news flow regarding the Occupy Central campaign.”

Big business apparently doesn’t like the Hong Kong democracy movement.

The Canadian, Italian, and Indian chambers of commerce issued a joint statement last month saying street protests risked damaging the city’s reputation as a good place to do business, the South China Morning Post reported.

The big four global accounting firms advertised in the Hong Kong press warning that Occupy Central could force multinationals to quit the territory.

And there were accusations by Occupy Central that HSBC and Standard Chartered pulled advertising from the Apple Daily, a popular anti-Beijing newspaper, because of pressure from the Chinese government.

The banks have both denied this, saying they withdrew their advertisements for commercial reasons.

The Irish Times Logo
Commenting on The Irish Times has changed. To comment you must now be an Irish Times subscriber.
SUBSCRIBE
GO BACK
Error Image
The account details entered are not currently associated with an Irish Times subscription. Please subscribe to sign in to comment.
Comment Sign In

Forgot password?
The Irish Times Logo
Thank you
You should receive instructions for resetting your password. When you have reset your password, you can Sign In.
The Irish Times Logo
Please choose a screen name. This name will appear beside any comments you post. Your screen name should follow the standards set out in our community standards.
Screen Name Selection

Hello

Please choose a screen name. This name will appear beside any comments you post. Your screen name should follow the standards set out in our community standards.

The Irish Times Logo
Commenting on The Irish Times has changed. To comment you must now be an Irish Times subscriber.
SUBSCRIBE
Forgot Password
Please enter your email address so we can send you a link to reset your password.

Sign In

Your Comments
We reserve the right to remove any content at any time from this Community, including without limitation if it violates the Community Standards. We ask that you report content that you in good faith believe violates the above rules by clicking the Flag link next to the offending comment or by filling out this form. New comments are only accepted for 3 days from the date of publication.