Connect with us

Economy

5 charts show how protests in Hong Kong have affected the city's economy and stock market – CNBC

Published

 on


Protesters occupy the arrival hall of the Hong Kong International Airport during a demonstration on August 12, 2019 in Hong Kong, China.

Anthony Kwan | Getty Images

Widespread protests in Hong Kong have lasted for more than six months — with little signs of abating anytime soon.

Hong Kong, a former British colony that returned to Chinese rule in 1997, is a global financial and business center that connects China and the world.

Protests in the city were initially sparked by proposed changes to a law that would have allowed extradition to mainland China. They later morphed into broader anti-government demonstrations that include demands such as greater democracy and universal suffrage, and at times involved violent clashes between protesters and the police.

Here are five charts to show how the protests have affected Hong Kong’s economy and stock market.

Hong Kong in recession

It could get worse for the city. Iris Pang, greater China economist at Dutch bank ING, projected Hong Kong’s annual gross domestic product to fall by 2.25% in 2019 and 5.8% in 2020.

Retail sales slump

Hong Kong consumers have been cautious about spending as the global economic outlook turned bleak early in the year. But the protests made consumers hold back spending even more, exacerbating the decline in the city’s retail sales.

Tourism decline

Visitors from mainland China, who account for close to 80% of tourists in Hong Kong, fell by around 4.45% in January to October this year compared to the same period in 2018.

Stocks up in 2019

Despite the pressure on the economy, Hong Kong’s benchmark stock index — the Hang Seng Index — appears on track to end 2019 higher than where it started the year.

That’s because investors still see the Hong Kong stock market as a way to buy and sell Chinese assets, according to Mark Mobius, founding partner at Mobius Capital Partners.

“There’s always an opportunity to enter China through Hong Kong, and that won’t go away any time soon,” Mobius told CNBC’s “Street Signs Asia” on Dec. 6.

Top market for listings

Hong Kong looks set to retain its position as the top market for new stock listings globally.

WATCH: What is Hong Kong’s relationship with China?

Let’s block ads! (Why?)



Source link

Continue Reading

Economy

Canadian retail sales slide in April, May as COVID-19 shutdown bites

Published

 on

december retail sales

Canadian retail sales plunged in April and May, as shops and other businesses were shuttered amid a third wave of COVID-19 infections, Statistics Canada data showed on Wednesday.

Retail trade fell 5.7% in April, the sharpest decline in a year, missing analyst forecasts of a 5.0% drop. In a preliminary estimate, Statscan said May retail sales likely fell by 3.2% as store closures dragged on.

“April showers brought no May flowers for Canadian retailers this year,” Royce Mendes, senior economist at CIBC Capital Markets, said in a note.

Statscan said that 5.0% of retailers were closed at some point in April. The average length of the closure was one day, it said, citing respondent feedback.

Sales decreased in nine of the 11 subsectors, while core sales, which exclude gasoline stations and motor vehicles, were down 7.6% in April.

Clothing and accessory store sales fell 28.6%, with sales at building material and garden equipment stores falling for the first time in nine months, by 10.4%.

“These results continue to suggest that the Bank of Canada is too optimistic on the growth outlook for the second quarter, even if there is a solid rebound occurring now in June,” Mendes said.

The central bank said in April that it expects Canada’s economy to grow 6.5% in 2021 and signaled interest rates could begin to rise in the second half of 2022.

The Canadian dollar held on to earlier gains after the data, trading up 0.3% at 1.2271 to the greenback, or 81.49 U.S. cents.

(Reporting by Julie Gordon in Ottawa, additional reporting by Fergal Smith in Toronto, editing by Alexander Smith)

Continue Reading

Economy

Canadian dollar notches a 6-day high

Published

 on

Canadian dollar

The Canadian dollar strengthened for a third day against its U.S. counterpart on Wednesday, as oil prices rose and Federal Reserve Chair Jerome Powell reassured markets that the central bank is not rushing to hike rates.

Markets were rattled last week when the Fed shifted to more hawkish guidance. But Powell on Tuesday said the economic recovery required more time before any tapering of stimulus and higher borrowing costs are appropriate, helping Wall Street recoup last week’s decline.

Canada is a major producer of commodities, including oil, so its economy is highly geared to the economic cycle.

Brent crude rose above $75 a barrel, reaching its highest since late 2018, after an industry report on U.S. crude inventories reinforced views of a tightening market as travel picks up in Europe and North America.

The Canadian dollar was trading 0.3% higher at 1.2271 to the greenback, or 81.49 U.S. cents, after touching its strongest level since last Thursday at 1.2265.

The currency also gained ground on Monday and Tuesday, clawing back some of its decline from last week.

Canadian retail sales fell by 5.7% in April from March as provincial governments put in place restrictions to tackle a third wave of the COVID-19 pandemic, Statistics Canada said. A flash estimate showed sales down 3.2% in May.

Still, the Bank of Canada expects consumer spending to lead a strong rebound in the domestic economy as vaccinations climb and containment measures ease.

Canadian government bond yields were mixed across a steeper curve, with the 10-year up nearly 1 basis point at 1.416%. Last Friday, it touched a 3-1/2-month low at 1.364%.

(Reporting by Fergal Smith; editing by Jonathan Oatis)

Continue Reading

Economy

Toronto Stock Exchange higher at open as energy stocks gain

Published

 on

Toronto Stock Exchange edged higher at open on Wednesday as heavyweight energy stocks advanced, while data showing a plunge in domestic retail sales in April and May capped the gains.

* At 9:30 a.m. ET (13:30 GMT), the Toronto Stock Exchange’s S&P/TSX composite index was up 16.77 points, or 0.08%, at 20,217.42.

(Reporting by Amal S in Bengaluru; Editing by Sriraj Kalluvila)

Continue Reading

Trending