Ten straight weeks of anti-government protests in Hong Kong are taking a sharp toll on an economy already hit by the U.S.-China trade war.
SEE ALSO : Protests affect Hong Kong Economy
The protests began as weekend marches, but have become a daily phenomenon. As police tear gas has been countered by demonstrator petrol bombs, retail, and tourism are taking a hit.
Global brands from Walt Disney to Prada have warned of the impact. Cathay Pacific Airways and other airlines have canceled hundreds of flights after a sudden airport shutdown this week.
More than $600 billion of stock market value has been erased since early July, and analysts are expressing concern that property values could slump.
Gross domestic product expanded just 0.6% in the second quarter and the continued unrest could raise the possibility of a recession, according to Bloomberg Economics.
Here, is a roundup of the mounting problems for Hong Kong’s economy and the businesses operating there:
Markets and Economy
Hong Kong’s stock market initially remained stable, but plunged as the violence escalated. Some economists believe a recession is possible if the protests continue, although Hong Kong’s government has vowed to take measures to shore up the economy.
Retail and Tourism
Hong Kong is one of the world’s largest luxury markets, and some major retailers are reporting slowdowns. Richemont and Swatch Group are among the luxury brands hit by store closures and decrease in tourist arrivals. InterContinental Hotels Group reported a decline in business travel in China amid a trade war with the U.S. and protests in Hong Kong.
Protesters have been storming the airport and blocking trains, pressuring airlines and the city’s major public transportation network.
The world’s most expensive housing market has stayed relatively stable, though analysts say the outlook is dimming. Properties at a key residential site near former airport, Kai Tak, sold at the area’s lowest prices in two years. CK Asset Holdings, the developer founded by billionaire Li Ka-shing, has postponed a planned sale of luxury condominiums.
Hong Kong’s business world is dominated by mammoth family empires, and some billionaire owners have taken a hit since the beginning of July from the market decline.
IPOs and Deals
The protest-related weakness in Hong Kong’s equity market has also hurt dealmaking. The volume of follow-on share offerings in the city, which normally do best when stocks are rising, has dropped. Funds raised via initial public offerings are also lower.