Hang Seng climbs as investors focus on progress on trade, not on violent rampage over extradition proposal

Images of rampage not good for Hong Kong’s reputation with foreign investors, says Louis Tse of VC Asset Management

Car stocks rally in mainland, Hong Kong with major conference drawing focus to new energy vehicles

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Hong Kong’s Legislative Council complex was left vandalised after protesters stormed the chamber during a protest against an extradition bill. Here, workers clean up. Photo: Felix Wong

Published: 5:49pm, 2 Jul 2019Updated: 5:49pm, 2 Jul 2019

Hong Kong investors played catch-up after a holiday, with shares climbing on US-China trade hopes, despite an uncharacteristically violent rampage Monday night that shocked many in the city and the world.

The Hang Seng Index on Tuesday closed up 1.2 per cent to 28,875.56, with casinos and smartphones gaining.

But Louis Tse, managing director of VC Asset Management, said longer term, the images of the violence did damage to Hong Kong’s reputation. And the American Chamber of Commerce in Hong Kong condemned the property damage as well, as opposed to earlier peaceful demonstrations against a proposal to allow extraditions to mainland China.

“As a foreign investor, I will be thinking what will be next? What will it be like in Hong Kong for the next year?”said Tse. “[Foreign] fund managers have portfolios in Hong Kong. Hong Kong’s IPO in renowned, and for potential share insurers, will they [continue] to believe in Hong Kong?”

Consumer stocks in Hong Kong are hot, but investors might be wise to let some cool off to avoid getting burned, experts say

Meanwhile, the Shanghai Composite Index ended down 0.96 per cent to 3,043.94, after a more than 2 per cent gain on Monday.