Working in Hong Kong: Hellish Commutes, Tear Gas, Tumbling Sales
Working in Hong Kong: Hellish Commutes, Tear Gas, Tumbling Sales
(Bloomberg) -- At the Eugene Baby store in Hong Kong’s central business district, the usual flood of customers who shop for toys, pacifiers and strollers on their lunch breaks has turned into a trickle.
On Wednesday, the aisles were mostly empty as a saleswoman spelled out the damage: Business was down 80% this week. Soon after she spoke, protesters began gathering a few blocks away -- at one point surrounding the city’s stock exchange as they geared up for a night of violent clashes with police.
As Hong Kong endures one of its most turbulent weeks since anti-government demonstrations began five months ago, the city’s companies and employees are finding it increasingly difficult to work around the chaos.
While past protests were mostly limited to weekends, the last three days have been marked by widespread transport shutdowns during morning rush hours, tear gas outside major office buildings and growing concern within multinational banks and other companies about worker safety. Some businesses are urging employees to cancel non-critical meetings and work from home. Many retailers, shopping malls and restaurants are closing early.
Of course, lots of Hong Kong workers are backers of the demonstrations. Some even lined the streets of the central business district in office attire this week to show support for black-clad protesters.
But with few signs of an end to the city’s political crisis, the worry is that continued disruptions to Hong Kong Inc. will drive up unemployment and plunge the economy deeper into recession.
Without a long-term solution, the city risks losing its role as one of the world’s most important financial and commercial hubs. Some workers based overseas are already avoiding non-essential travel to the former British colony, in certain cases holding meetings across the border in Shenzhen.
“What we are witnessing is very worrisome,” said Yiu Si-wing, a Hong Kong lawmaker who’s closely aligned with the city’s tourism industry. He said sales at Hong Kong hotels plunged about 50% in October and are on track to tumble at an even faster rate this month.
The city’s latest bout of unrest follows the death on Nov. 8 of a 22-year-old student, who fell off the edge of a parking garage as police were clearing protesters with tear gas nearby. Hundreds of protesters seized on the incident to engage in battles with police that resulted in one person being shot on Monday, further inflaming tensions.
Parts of the city have been paralyzed as protesters set up roadblocks and forced the closure of subway stations.
Kimmy, who has a back-office job at a listed company in the central business district, worked just four hours on Monday after disruptions to public transport turned her 40-minute commute into a three-hour slog. Half of her colleagues in the company’s trading department didn’t even come into the office.
Hao Hong, head of research at Bocom International, said he canceled meetings and struggled to get some tasks done as the protests left members of his team stuck in traffic or unable to come into the office. “For us to perform effectively, we have to be together,” Hong said. “But of course, safety first.”
That sentiment was echoed by BNP Paribas SA in a memo to employees on Wednesday: “Where meetings are already planned, managers should not hesitate to cancel and reschedule depending on the evolution of the situation.”
At JPMorgan Chase & Co.’s main Hong Kong offices, where some of this week’s worst clashes between protesters and police have taken place steps away, employees were reminded to make arrangements “in circumstances that require flexibility (e.g. family needs, school closures, transport issues.)”
Some in the finance industry have carried on despite the protests. About 1,100 people attended a private equity and dealmaking conference at the Hong Kong Four Seasons this week, close to the same amount as last year, even as protesters and police in full riot gear battled each other nearby.
Trading of stocks in Hong Kong’s benchmark Hang Seng Index was about 23% higher than the 30-day average on Wednesday. What’s more, the Hong Kong exchange approved Alibaba Group Holding Ltd.’s plans for a blockbuster share sale that could take place before year-end.
“Protests haven’t disrupted the workflow too much,” Jim McCafferty, the joint head of equity research for Asia ex-Japan at Nomura Holdings Inc., said by phone on Tuesday. Employees who need to work from home have been able to do so, he said. “It’s absolutely possible to be geographically agnostic and work from anywhere.”
Still, it’s far from business as usual in Hong Kong. While equity turnover in the city was buoyant on Wednesday, the action was dominated by sellers. The MSCI Hong Kong Index sank 2.4%, one of its biggest single-day losses since the protests began.
And despite a relatively healthy market for initial and secondary stock offerings, M&A transactions have dried up. The pace of Hong Kong takeovers by Chinese companies has plunged 80% since June, according to data compiled by Bloomberg.
Airy Lau, an investment director at Fair Capital Management Ltd., said he exited all his positions in Hong Kong stocks over the past few months because of the protests, shifting the money into mainland China. “There is just too much uncertainty,” he said.
--With assistance from Ina Zhou, Manuel Baigorri, Kari Lindberg, Kiuyan Wong and Hannah Dormido.
To contact the reporters on this story: Jinshan Hong in Hong Kong at jhong214@bloomberg.net;Elena Popina in Hong Kong at epopina@bloomberg.net;Alfred Liu in Hong Kong at aliu226@bloomberg.net
To contact the editors responsible for this story: Michael Patterson at mpatterson10@bloomberg.net, ;Rachel Chang at wchang98@bloomberg.net, David Scheer
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