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Wednesday, December 25, 2019

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

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?

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