Taipei, Taiwan – Like many Hong Kongers, accountant Edelweiss Lam spent the last week watching the city’s stock market wipe out 14 months of gains as the Hang Seng Index fell below the psychological threshold of 15,000 points.
It was not the first time Lam, who has been investing on and off in Hong Kong stocks since the late 1990s, had seen it happen.
The index dropped below 15,000 points during SARS in 2003, the Global Financial Crisis in 2008, and zero-COVID lockdowns in 2022.
But while ebbs and flows are part of the investment game, Lam said watching the key measure of Hong Kong’s stock market tumble “back to square one” felt different this time.
“It seems I cannot see the future,” Lam told Al Jazeera by phone from Hong Kong.
The reason, Lam said, is China.
As Beijing increases its control over all aspects of life in Hong Kong, including the economy, and gloom persists about the state of China’s post-pandemic recovery, investors have been voting with their money and looking to other markets.
More than a quarter-century after Hong Kong’s return to China, the Hang Seng is more or less back to where it was during its final days as a British colony.
On Friday, the index hovered below 16,100 points – lower than it was on July 1, 1997, the day of the handover.
Over the same period, stocks in the United States, Japan and other popular markets have flourished.
Investors in the SP500, the most popular measure of the performance of the US market, have seen their money grow nearly 10-fold since 1997.
Hong Kong’s stock market has seen big losses over the last year [Al Jazeera]
“If there’s any new announcement from the Chinese government about regulations or the control of some industry, then the market can fluctuate very seriously,” said Lam, whose investment portfolio includes blue chip stocks, fixed-term deposits and property.
“The relationship between Hong Kong and China is closer and closer, the control is tighter, so we cannot ignore what they are doing in China.”
Hong Kong has had a front-row seat to China’s crackdowns in recent years, from the imposition of a draconian national security law on the city to tightening regulation of corporate giants such as Alibaba and Tencent and raids on foreign companies on the Chinese mainland.
Many of China’s biggest companies are dual-listed in Hong Kong and China and make up a large portion of the Hang Seng Index along with Chinese banks and other tech companies.
At the same time, China’s economy has struggled to recover from the impact of COVID-19 and Beijing’s harsh pandemic restrictions, amid nagging structural issues including a shrinking population, high local government debt, and a slow-moving real estate crisis.
Gross domestic product officially grew 5.2 percent in 2023 – the weakest performance in decades, excluding the pandemic.
Despite Beijing’s insistence that China is open for business, foreign investors’ confidence is waning.
Last year, China recorded the first drop in foreign direct investment in 12 years, with inflows declining 8 percent to $157.1bn.
“When we look at broader business sentiment both for the financial sector and for the general economy – first and foremost, economic fundamentals both in Hong Kong and in China are not doing very well at the moment,” Chim Lee, a China analyst at the Economist Intelligence Unit, told Al Jazeera.
Lee said China hitting its economic growth target last year was “not particularly impressive” as Beijing set a relatively weak target.
Analysts estimate that some $6 trillion – the equivalent of over one-quarter of the entire output of the US economy – has been wiped off stock markets in China and Hong Kong since early 2021.
China’s CSI 300 Index, which measures the top 300 companies on the Shanghai and Shenzhen stock exchanges, has fallen more than 40 percent over the past three years, while the Hang Seng has fallen 50 percent over the same period, according to Bloomberg data.
Investors are instead flocking to other markets like Japan and the US where analysts predict a bullish 2024.
The Nikkei 255 Index, an index of the Tokyo Stock Exchange’s top companies, posted highs not seen in over 30 years last week, while the S&P 500 in New York closed at an all-time high for the sixth day in a row on Thursday.
Investor confidence in Hong Kong has taken a hit amid China’s crackdowns [File: Anthony Kwan/Getty Images]
“[Hong Kong’s] economy may now be no more than a large rounding error on China’s GDP but it still plays an important role in finance and capital market transactions for and with the Mainland. So it’s self-evident that bearish sentiment and beaten up stock price valuations in China proper wash over into [Hong Kong] too,” George Magnus, an associate at Oxford University’s China Centre and Research Associate at SOAS, London, told Al Jazeera.
Hong Kong’s declining rights and freedoms – which are supposed to be guaranteed until 2047 under an agreement known as “one country, two systems” – have added fuel to the crisis of confidence.
Since the passage of the national security law in 2020, the city’s political opposition and independent media have been all but wiped out and hundreds of people have been arrested for non-violent offences related to activism and speech.
Hundreds of thousands of Hong Kongers have left the city amid Beijing’s tightening control along with their money.
Lam said she decided last year to move her pension fund overseas and she plans to sell her remaining stock investments in Hong Kong at a loss.
“They say they want to do something, but we don’t see real action,” Lam said of the government’s policy on the economy.
In October, Hong Kong slashed stamp duty on property sales and stock transfers, but consumption and tourism have yet to recover to pre-pandemic levels.
The US stock market has seen big gains as Hong Kong’s bourse has stagnated [Al Jazeera]
Analysts say that reviving both Hong Kong and China’s economy will take much bolder action.
Beijing is considering a potential $278bn rescue plan for the stock market, Bloomberg reported this week, citing sources close to the matter, but many analysts argue broader structural reforms are needed to restore investor confidence.
A similar rescue plan deployed after a tumble in China’s stock market in 2015 produced mixed results – even though the government moved quickly and the overall economy was on a stronger footing.
Memories of that rescue plan and concerns that Beijing will not make difficult but necessary reforms are one reason why the rescue plan has been met with a lukewarm response, said Alicia Garcia Herrero, chief economist for Asia Pacific at Natixis.
“Here it’s really the market saying, I’m sorry you’re not growing. I don’t trust your numbers; your future looks gloomy – which wasn’t the case in 2015. It was perceived to be a temporary shock, so I think this is, to start, the difference,” Garcia Herrero told Al Jazeera.
Beijing arguably also has less room to manoeuvre this time thanks to its high levels of debt and limited scope of monetary easing.
“They’ve used so many bullets, the credibility of the next bullet is lower,” she said.
Almost seven years since news broke of an alleged conspiracy to fix the price of packaged bread across Canada, the saga isn’t over: the Competition Bureau continues to investigate the companies that may have been involved, and two class-action lawsuits continue to work their way through the courts.
Here’s a timeline of key events in the bread price-fixing case.
Oct. 31, 2017: The Competition Bureau says it’s investigating allegations of bread price-fixing and that it was granted search warrants in the case. Several grocers confirm they are co-operating in the probe.
Dec. 19, 2017: Loblaw and George Weston say they participated in an “industry-wide price-fixing arrangement” to raise the price of packaged bread. The companies say they have been co-operating in the Competition Bureau’s investigation since March 2015, when they self-reported to the bureau upon discovering anti-competitive behaviour, and are receiving immunity from prosecution. They announce they are offering $25 gift cards to customers amid the ongoing investigation into alleged bread price-fixing.
Jan. 31, 2018: In court documents, the Competition Bureau says at least $1.50 was added to the price of a loaf of bread between about 2001 and 2016.
Dec. 20, 2019: A class-action lawsuit in a Quebec court against multiple grocers and food companies is certified against a number of companies allegedly involved in bread price-fixing, including Loblaw, George Weston, Metro, Sobeys, Walmart Canada, Canada Bread and Giant Tiger (which have all denied involvement, except for Loblaw and George Weston, which later settled with the plaintiffs).
Dec. 31, 2021: A class-action lawsuit in an Ontario court covering all Canadian residents except those in Quebec who bought packaged bread from a company named in the suit is certified against roughly the same group of companies.
June 21, 2023: Bakery giant Canada Bread Co. is fined $50 million after pleading guilty to four counts of price-fixing under the Competition Act as part of the Competition Bureau’s ongoing investigation.
Oct. 25 2023: Canada Bread files a statement of defence in the Ontario class action denying participating in the alleged conspiracy and saying any anti-competitive behaviour it participated in was at the direction and to the benefit of its then-majority owner Maple Leaf Foods, which is not a defendant in the case (neither is its current owner Grupo Bimbo). Maple Leaf calls Canada Bread’s accusations “baseless.”
Dec. 20, 2023: Metro files new documents in the Ontario class action accusing Loblaw and its parent company George Weston of conspiring to implicate it in the alleged scheme, denying involvement. Sobeys has made a similar claim. The two companies deny the allegations.
July 25, 2024: Loblaw and George Weston say they agreed to pay a combined $500 million to settle both the Ontario and Quebec class-action lawsuits. Loblaw’s share of the settlement includes a $96-million credit for the gift cards it gave out years earlier.
Sept. 12, 2024: Canada Bread files new documents in Ontario court as part of the class action, claiming Maple Leaf used it as a “shield” to avoid liability in the alleged scheme. Maple Leaf was a majority shareholder of Canada Bread until 2014, and the company claims it’s liable for any price-fixing activity. Maple Leaf refutes the claims.
This report by The Canadian Press was first published Sept. 19, 2024.
Companies in this story: (TSX:L, TSX:MFI, TSX:MRU, TSX:EMP.A, TSX:WN)
TORONTO – Canada’s main stock index was up more than 250 points in late-morning trading, led by strength in the base metal and technology sectors, while U.S. stock markets also charged higher.
The S&P/TSX composite index was up 254.62 points at 23,847.22.
In New York, the Dow Jones industrial average was up 432.77 points at 41,935.87. The S&P 500 index was up 96.38 points at 5,714.64, while the Nasdaq composite was up 486.12 points at 18,059.42.
The Canadian dollar traded for 73.68 cents US compared with 73.58 cents US on Thursday.
The November crude oil contract was up 89 cents at US$70.77 per barrel and the October natural gas contract was down a penny at US2.27 per mmBTU.
The December gold contract was up US$9.40 at US$2,608.00 an ounce and the December copper contract was up four cents at US$4.33 a pound.
This report by The Canadian Press was first published Sept. 19, 2024.
VANCOUVER – Supervised injection sites are saving the lives of drug users everyday, but the same support is not being offered to people who inhale illicit drugs, the head of the BC Centre for Excellence in HIV/AIDS says.
Dr. Julio Montaner said the construction of Vancouver’s first indoor supervised site for people who inhale drugs comes as the percentage of people who die from smoking drugs continues to climb.
The location in the Downtown Eastside at the Hope to Health Research and Innovation Centre was unveiled Wednesday after construction was complete, and Montaner said people could start using the specialized rooms in a matter of weeks after final approvals from the city and federal government.
“If we don’t create mechanisms for these individuals to be able to use safely and engage with the medical system, and generate points of entry into the medical system, we will never be able to solve the problem,” he said.
“Now, I’m not here to tell you that we will fix it tomorrow, but denying it or ignoring it, or throw it under the bus, or under the carpet is no way to fix it, so we need to take proactive action.”
Nearly two-thirds of overdose deaths in British Columbia in 2023 came after smoking illicit drugs, yet only 40 per cent of supervised consumption sites in the province offer a safe place to smoke, often outdoors, in a tent.
The centre has been running a supervised injection site for years which sees more than a thousand people monthly and last month resuscitated five people who were overdosing.
The new facilities offer indoor, individual, negative-pressure rooms that allow fresh air to circulate and can clear out smoke in 30 to 60 seconds while users are monitored by trained nurses.
Advocates calling for more supervised inhalation sites have previously said the rules for setting up sites are overly complicated at a time when the province is facing an overdose crisis.
More than 15,000 people have died of overdoses since the public health emergency was declared in B.C. in April 2016.
Kate Salters, a senior researcher at the centre, said they worked with mechanical and chemical engineers to make sure the site is up to code and abidies by the highest standard of occupational health and safety.
“This is just another tool in our tool box to make sure that we’re offering life-saving services to those who are using drugs,” she said.
Montaner acknowledged the process to get the site up and running took “an inordinate amount of time,” but said the centre worked hard to follow all regulations.
“We feel that doing this right, with appropriate scientific background, in a medically supervised environment, etc, etc, allows us to derive the data that ultimately will be sufficiently convincing for not just our leaders, but also the leaders across the country and across the world, to embrace the strategies that we are trying to develop.” he said.
Montaner said building the facility was possible thanks to a single $4-million donation from a longtime supporter.
Construction finished with less than a week before the launch of the next provincial election campaign and within a year of the next federal election.
Montaner said he is concerned about “some of the things that have been said publicly by some of the political leaders in the province and in the country.”
“We want to bring awareness to the people that this is a serious undertaking. This is a very massive investment, and we need to protect it for the benefit of people who are unfortunately drug dependent.” he said.
This report by The Canadian Press was first published Sept. 18, 2024.
