International | Protest In Hong Kong | Aug 19th-25th

Protest in Hong Kong affecting Markets

In the past month, U.S. news has been flooded with videos and images of mass protest in Hong Kong. These protests have been occurring since March 31st of 2019. The citizens of Hong Kong are protesting an extradition bill which was proposed by the government that would allow authorities in Hong Kong to detain and extradite individuals who are wanted in mainland China and Taiwan. Hong Kong citizens fear this bill would put them under mainland China Jurisdiction.

But how does this affect the market in Hong Kong? For starters, the Hong Kong Stock Exchange, the HKEX, is the third-largest stock exchange in Asia, thus the current political protests are having a large impact. The Hang Seng index has decreased 13% since the protest began, as of closing this past Friday. Not only do these protests affect the entire market but also companies looking to list on the market. Alibaba, a Beijing based E-Commerce business, is one of these companies. Alibaba was scheduled to have its IPO this past week however they decided not to in light of the current political state. With the IPO estimated to be up to $20 Billion, the Chinese government likely withheld the IPO from Hong Kong to show strength in the face of the Protestors. Other companies that were considering listing before year-end will likely follow Alibaba’s path of not listing.