Aug 13, 2019

Cathay Pacific shares take a direct hit from Hong Kong protests

Data: FactSet; Chart: Andrew Witherspoon/Axios

The unrest in Hong Kong hit the market hard Tuesday as the Hang Seng Index fell 2.1%. The territory's flagship airline Cathay Pacific saw shares tumble 2.55%, after a 4.9% slide on Monday that pushed the stock to its lowest price in a decade.

The backdrop: Hong Kong International Airport once again stopped all flights after protesters occupied the building for a fourth straight day as part of escalating citywide protests against a law that would allow China to extradite and try citizens from Hong Kong in the mainland.

  • On Friday, China ordered Cathay Pacific to suspend any staff who supported the protests. More than 14,000 Cathay employees had reportedly joined an effort to shut down the airport that led to the cancellation of more than 200 flights.
  • Over the weekend, Cathay's management said they would abide by the Chinese government's demands, and warned workers they could be fired for supporting protests.

Watch this space: Steve Eisman, a fund manager portrayed in “The Big Short,” says the Hong Kong protests are his biggest worry, as they could endanger the likelihood of a trade deal between the U.S. and China and hurt the global economy.

  • “I think the potential black swan ... is what’s happening in Hong Kong right now,” Eisman, a managing director and senior portfolio manager at Neuberger Berman, said in an interview on CNBC.

Go deeper: Cathay Pacific threatens to fire staff who support Hong Kong protests

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Hong Kong airport protests: What you need to know

Travelers look at posters placed by Hong Kong protesters at the airport on Wednesday. Photo: Vincent Thian/AP

While President Donald Trump suggested a meeting with Chinese leader Xi Jingping over the Hong Kong crisis, China called the protests "close to terrorism" as normal operations began to resume at the international airport, the BBC reports.

What's new: The Airport Authority said late Wednesday that any application to protest in the terminal must be made in advance with a "Letter of No Objection" to be obtained from police, as security was heightened in the area, per Reuters. CNN notes that nearly 1,000 flights were canceled this week over the massive protests at the airport, which saw riot police clash with activists. More protests are planned for Friday, Reuters notes.

Go deeperArrowUpdated Aug 15, 2019

Hong Kong protests assert the freedoms China seeks to constrain

Pro-democracy protestors at Hong Kong's international airport. Photo: Manan Vatsyayana/AFP/Getty Images

Intensifying protests in Hong Kong — continuing weeks after the shelving of a controversial extradition law — have fueled a broader struggle over the city's character and future.

Why it matters: Hong Kong remains an important financial gateway from China to the world, although Shanghai and other mainland cities have taken on part of that role. Above all, the central government in Beijing wants to avoid the precedent of a popular political movement successfully challenging President Xi and the authority of the Communist Party.

Go deeperArrowAug 14, 2019

Pence suggests Hong Kong clampdown could prevent China trade deal

Trucks and armoured personnel vehicles mass across the border from Hong Kong, in Shenzhen. Photo: Getty Images

Vice President Mike Pence said Monday that the U.S. would not make a deal to end its trade dispute with China if Beijing fails to "honor its commitments" to Hong Kong, Reuters reports.

The big picture: The remark comes a day after President Trump said it would "be very hard to deal if they do violence [in Hong Kong]. ... I mean if it's another Tiananmen Square, I think it's a very hard thing to do." Trump's economic advisers had previously insisted they were treating the trade dispute as a separate issue from other concerns, like human rights.

Go deeperArrowAug 19, 2019