Hong Kong credit rating at risk of further downgrade if protests continue, Fitch warns
- Continued anti-government protests could further tarnish the city’s business environment, rule of law and government institutions, warn the ratings agency
- Last Friday, Fitch cut Hong Kong’s credit rating for the first time since 1995, trimming it by one notch to AA from AA+
Prolonged anti-government protests in Hong Kong will only cause greater damage to the city’s reputation, said Andrew Fennell, the head of sovereign ratings at Fitch Ratings, on Tuesday, pointing to the possibility of a further downgrade in the city’s credit rating.
The outlook for the city’s credit rating was also cut to negative from stable even after Chief Executive Carrie Lam Cheng Yuet-ngor announced last week that the controversial extradition bill would be withdrawn, meeting one of the five demands laid out by protesters.
The rating agency followed the sovereign rating downgrades with another announcement on Tuesday lowering MTR Corporation’s long-term foreign- and local-currency issuer default rating from AA+ to AA with a negative outlook.
Continued political unrest would further tarnish international and domestic perceptions of Hong Kong, including its business environment, rule of law and government institutions, Fennell said.
“In spite of some concessions to protesters’ demands, we believe that there is still a chance that public discontent will linger,” Fennell said. “It is still an ongoing conflict and it hasn’t yet been resolved and that is reflected in the negative outlook.”
