Fund managers expect the Hong Kong stock market to be volatile in the coming weeks, with retailers and property developers likely to bear the brunt of speculative selling on concern retail sales will suffer if the Occupy Central protests drag on and fears the city’s economic competitiveness will weaken because of political uncertainty.
In fact, property stocks were singled out in a March report by Swiss investment bank UBS as among the most vulnerable to the financial fallout from Occupy Central protests, with Singapore-listed Hongkong Land Holdings Limited (SGX: H78), the biggest landlord in Central, and The Wharf (Holdings) Limited (OTCMKTS: WARFY; OTCMKTS: WARFF), which owns two of the city’s most popular shopping malls, Harbour City and Times Square, being seen as especially vulnerable.
In addition, Great Eagle Holdings Limited (HKG: 0041), one of the city’s biggest hotel owners and operators; the Hang Lung Group Ltd (OTCMKTS: HNLGY), which owns offices in Central; and jewellery firms Chow Tai Fook Jewellery Group Ltd (HKG: 1929) and Chow Sang Sang Holdings International (OTCMKTS: CHOWF) that are major beneficiaries of big-spending mainland Chinese tourists have all taken share hits.
However, financial services stocks have been relatively unscathed – despite 23 banks announcing the temporary closure of 44 branches.
The SCMP quoted Victoria Mio, the chief investment officer and lead portfolio manager at the Robeco Chinese Equities Fund, as saying:
“Sector-wise, retailers and landlords are the ones to be affected most, while for residential property developers, as long as they maintain their primary market sales at a robust level, their share price would bounce back once the protest ceases. Meanwhile, we see a buying opportunity for China-related stocks, as fundamentally this protest does not affect them.”
To read the whole article, Stocks set to fall at open, authorities pledge smooth market operations as Occupy protests extend, go to the website of the South China Morning Post. In addition, check out the following articles: Investors Could Short Hong Kong to Hedge Long Shanghai Positions (BOCOM International) and Fund Manager Consensus: Hong Kong Needs China More Than Vice Versa (AsianInvestor).
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