Hong Kong stocks dropped on Wednesday as a consequence of political protests against an extradition bill that has been shaking the city-state since Sunday.
The Hang Seng index lowered by 1.7% as the stock market closed on June 12. Property companies Wharf Real Estate Investment and New World Development were hit the hardest, falling by 5.4% and 4.2% respectively.
The controversial bill which would allow Hong Kong residents to be extradited to mainland China, Taiwan and Macau was scheduled for debate by lawmakers in a Legislative Council on Wednesday morning.
However, tens of thousands of protesters blocked key roads leading to the government offices located in the financial district, thus preventing the debate from taking place. The meeting was later postponed by the officials.
The once-British colony was returned to China in 1997 when it was granted a semiautonomous legal system by Beijing for the next 50. Both its citizens and foreign companies enjoyed the freedoms the city-state allowed, but the proposed bill threatens to limit them and chase foreign capital away.
The largest demonstrations in the last 30 year could have dire consequences on the Hong Kong economy, critics warn. “People loved Hong Kong because it was China, but it wasn’t China. If Hong Kong is going to become more like China, of course, they’re going to be looking elsewhere including Singapore” said Richard Harris, the CEO of Port Shelter Investment Management to CNN.
Asian analysts have a more optimistic take on the situation—they predict the protests will affect the market similarly to how the 2014 pro-democracy demonstrations did. The chief economist of GE Oriental Financial Group, Francis Lun believes the stock market will be shaken but he doesn’t expect it to crash.
Even though protesters are growing in numbers daily, Carrie Lam, Chief executive of Hong Kong, is determined to move forward with the extradition bill. In a statement issued on Sunday, April 29, Lam said the proposed law is designed to close the loopholes in Hong Kong’s legislative system that allows fugitives from mainland China to seek protection in the city.