Hong Kong’s appeal to the financial community has withstood pro-democracy protests that threatened to become the city’s biggest political crisis in decades, according to a Bloomberg Global Poll.
Eighty-seven percent of the survey’s 510 respondents said the democracy movement that blocked major roads and shopping districts for seven weeks hasn’t diverted financial activity away from the city. Fifty-seven percent said the protests could drive away business if they continue, while 30 percent said that the protests were unlikely to affect the city’s position as a financial center. Ten percent said they weren’t sure.
“Hong Kong has a strong rule of law and continues to be a major Asian financial hub,” said Jason Petras, a Sydney-based portfolio manager at BT Investment Management Ltd. His firm had seen no disruption in its trading of Hong Kong options and futures, said Petras, who participated in the quarterly poll of investors, traders and analysts who are Bloomberg subscribers.
The Hang Seng Index has risen 0.5 percent since the demonstrations started Sept. 26, even as the occupation pushes the government to predict full-year economic growth close to the bottom of its forecast range. Support for the protests is waning and police-backed court bailiffs are preparing to exercise injunctions to clear some of the blockades this week.
The Bloomberg Global Poll was conducted on Nov. 11-12 by Selzer & Co., a Des Moines, Iowa-based firm, and has a margin of error of plus or minus 4.3 percentage points.
Hong Kong’s High Court ruled last week that bailiffs are allowed to take measures to remove obstructions in some parts of the city. The former British colony and Shanghai opened a stock-trading link yesterday to allow access to each other’s markets.
“I have no concern whatsoever about any bigger calamity,” said Niklas Hageback, a partner at Valkyria Kapital Ltd., a Hong Kong-based money-management firm that oversees about $116 million. “Money is still flowing in here, no one is taking anything out.”
Support for the movement is fading amid signs it hasn’t compelled China’s government to reverse a decision to vet candidates for Hong Kong’s next chief executive in 2017 elections. Three student activists were blocked from flying to Beijing over the weekend to press their case with Chinese leaders.
The protesters should give up their occupation immediately, according to 67.4 percent of respondents in a Chinese University of Hong Kong poll conducted from Nov. 5 to Nov. 11. The number of people at the tent city in the main protest site has dwindled to hundreds from a peak of 200,000 estimated by organizers.
The city’s bourse, which occasionally shuts during strong typhoons, remained open throughout the crisis. Crowds swelled after riot police used tear gas on demonstrators on Sept. 28, causing the Hang Seng’s biggest two-day slump in more than seven months. The benchmark gauge lost 3.2 percent in that period, as the city’s dollar sank to the weakest level since May 2012 versus its U.S. counterpart.
The Hong Kong-Shanghai trading link that began yesterday will allow a net 23.5 billion yuan ($3.8 billion) of daily cross-border purchases. The program opens China’s stock market further to foreigners, while giving some Chinese investors a route to buy Hong Kong stocks.
“Hong Kong retains a range of advantages,” BT’s Petras said. “Having lived there for five years, I know it’s a dynamic place that has a long history of dealing with whatever it is up against.”
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