Hongkongers See Red
Hong Kongese stocks are treading a fine line between market pull-back and market crisis. A rough patch since April has been led by real estate, with protests causing the rich and famous to think twice about buying their million-dollar penthouses in the region!
Protests of epic proportions have caused Hong Kong to grind to a standstill. The juxtaposition between life in Hong Kong and life in mainland China can look stark at times, with many mainlanders completely unaware of the fallout down South. In a nutshell, Hongkongers are demonstrating against officials who want to cart mainland Chinese criminals back to China for their trials, due to the violent treatment they might face. It’s blown up a bit, but a good investor never mixes politics and investing.
However, that doesn’t mean a good investor is off the hook. With the region in chaos, real estate tycoons are about $50 billion down as demand to live in the area dries up. Folks are reluctant to move into current homes, and new builds are on pause. One firm caught in the middle of this has seen its stock plunge by a third since things got ugly in April. Asia’s third-richest family owns it!
Investors who’ve diversified into Hong Kong markets may have already fled the scene, but those still there may now be rooting for China in the trade war. Hong Kong markets take the lead from the rest of China, where stocks have gone nowhere since a crash in 2015.
Systemic setback or temporary tantrum? That’s what opportune investors are asking right now as they await demonstrators’ decision to pack up, and more market players to poke their heads up again!