Economic Situation - Instability |
As a result of all the protests and Occupy Central activities, many aspects of the economy have been affected. These affects leads to many anti-protest protestors who demand the normal operation of business.
1) Stock Market
As shown in the picture, the financial situation is not very positive as of 10.23.2014, about a month after the first day of Occupy Central.
* Data from Hang Seng official webstie:http://www.hsi.com.hk/HSI-Net/.
Other news articles have reported this negative impact of Occupy Central on Hong Kong economy.
-Barron's:
"Occupy Central caused an abrupt reaction in the stock market. In the first two days of the demonstrations, the Hang Seng Index fell by a cumulative 3.1% to 22,933, the lowest level in two-and-a-half months. The Index has made up for some lost ground and rebounded to near pre-demonstration levels in just a few days time. More short-term volatility is inevitable."
"The costs to social cohesion are real but not quantifiable."
-Bloomberg:
"After capping a 7.3 percent loss last month, the Hang Seng Index traded at 1.3 times net assets yesterday, a 35 percent discount to the MSCI World Index. That was 15 percent less than its five-year average, according to data compiled by Bloomberg."
As shown in the picture, the financial situation is not very positive as of 10.23.2014, about a month after the first day of Occupy Central.
* Data from Hang Seng official webstie:http://www.hsi.com.hk/HSI-Net/.
Other news articles have reported this negative impact of Occupy Central on Hong Kong economy.
-Barron's:
"Occupy Central caused an abrupt reaction in the stock market. In the first two days of the demonstrations, the Hang Seng Index fell by a cumulative 3.1% to 22,933, the lowest level in two-and-a-half months. The Index has made up for some lost ground and rebounded to near pre-demonstration levels in just a few days time. More short-term volatility is inevitable."
"The costs to social cohesion are real but not quantifiable."
-Bloomberg:
"After capping a 7.3 percent loss last month, the Hang Seng Index traded at 1.3 times net assets yesterday, a 35 percent discount to the MSCI World Index. That was 15 percent less than its five-year average, according to data compiled by Bloomberg."
2) Retail Businesses
With limitations of access of normal citizens on the street, many retailers along the streets suffered greatly from the protest. Although students and protestors themselves will sometimes buy things from the retailers, the demand is far less than a normal business day.
-QUARTZ:
"Hong Kong’s retailers may have lost HK$2.2 billion ($284 million) in sales because of the protests in their first week, ANZ senior economist Raymond Yeung estimated. The Golden Week usually accounts for half of October’s sales, because of mainland visitors traveling to Hong Kong to shop, and “market anecdotes suggest that sales of the shops have declined by about 70%,” he said. On that basis, if the protests continue to the end of this week, they will cost another HK$1.1 billion ($142 million) in sales losses, for a two-week total of HK$3.3 billion ($426 million)."
With limitations of access of normal citizens on the street, many retailers along the streets suffered greatly from the protest. Although students and protestors themselves will sometimes buy things from the retailers, the demand is far less than a normal business day.
-QUARTZ:
"Hong Kong’s retailers may have lost HK$2.2 billion ($284 million) in sales because of the protests in their first week, ANZ senior economist Raymond Yeung estimated. The Golden Week usually accounts for half of October’s sales, because of mainland visitors traveling to Hong Kong to shop, and “market anecdotes suggest that sales of the shops have declined by about 70%,” he said. On that basis, if the protests continue to the end of this week, they will cost another HK$1.1 billion ($142 million) in sales losses, for a two-week total of HK$3.3 billion ($426 million)."
3) The Future - Long-term Influence
In the long-term, political risk and instability can creates mistrust and thus slow down the economy. A large part of this risk come from social unrests and protests. This long-term effect is even more dangerous than short-term economic sufferings.
-SFGATE
"When demonstrations end and tourists return, it will be business as usual. The real challenge is an extended period of political uncertainty and mistrust among multiple stakeholders in Hong Kong even after the normalization of economic activities."
In the long-term, political risk and instability can creates mistrust and thus slow down the economy. A large part of this risk come from social unrests and protests. This long-term effect is even more dangerous than short-term economic sufferings.
-SFGATE
"When demonstrations end and tourists return, it will be business as usual. The real challenge is an extended period of political uncertainty and mistrust among multiple stakeholders in Hong Kong even after the normalization of economic activities."