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Hong Kong unrest torches fortunes of city’s billionaires, wipes $15bn from top tycoons’ net worth

Hong Kong unrest torches fortunes of city’s billionaires, wipes $15bn from top tycoons’ net worth

Hong Kong’s stock market rout has lopped about $15bn off the net worth of its 10 richest tycoons, as conflicts between police and protesters that have weighed on asset prices show few signs of letting up.

Li Ka-shing, Hong Kong’s richest man, has racked up paper losses of more than $3bn since the end of July, according to Financial Times calculations based on Bloomberg data tracking the billionaires’ disclosed positions in listed companies.

Mr Li, as well as Lee Shau-kee, head of Henderson Land, and Lee Man-tat, chairman of the parent company of sauce maker Lee Kum Kee, have seen their fortunes drop almost one-tenth in August. Representatives of the three men did not respond to requests for comment.

The protests, sparked by a bill proposed by the territory’s chief executive Carrie Lam that would allow the extradition of suspects to mainland China for the first time, had until this month left stocks relatively unscathed.

But as protests have intensified in the face of government inaction and police crackdowns, the benchmark Hang Seng index has dropped about 8 per cent over the past fortnight.

The sell-off has put the index in the red for 2019, making it the only developed market benchmark in negative territory among the 25 tracked by Bloomberg. Hong Kong’s total market capitalisation has dropped about HK$2.67tn ($340bn) so far this month.

As Beijing’s rhetoric has ramped up, the territory’s property tycoons have made shows of loyalty through their companies, which have issued statements supporting Ms Lam and local police.

But such moves have not done much to stem losses. Falls in property stocks of 8.5 per cent this month have outstripped the broader market’s decline.

On Friday, Mr Li took out a front-page advertisement in multiple Hong Kong newspapers calling for an end to violence and for people to love China and Hong Kong.

Willy Lam, a China expert at the Chinese University of Hong Kong, said the unrest had probably prompted local tycoons to privately ask Beijing for a softer approach towards Hong Kong in the short term.

“They also realise that perhaps Hong Kong’s situation would take months if not more than a year to resolve,” he added, which could encourage them to take their money elsewhere.

Mr Li, 91, is among several tycoons who have shifted away from Hong Kong and Chinese property development in recent years, homing in on businesses in developed western countries that generate stable cash flows.

Last summer, his CK Hutchison conglomerate bought the remaining 50 per cent of Wind Tre for €2.45bn, for example, becoming the sole owner of the Italian mobile telecommunications provider. In March 2018, Mr Li passed the management reins of his empire to his eldest son, Victor.

Should more local billionaires follow suit it could have adverse consequences for Hong Kong’s economy.

That would spell further trouble for Ms Lam, who has staked the future of her administration on fostering an economic rebound for Hong Kong rather than submitting to demands for a full withdrawal of the extradition bill, an independent inquiry into police violence and calls for her to step down.

There is little on the horizon to cheer investors, however. While Ms Lam’s financial secretary announced an economic support package of HK$19.1bn on Thursday evening, this was paired with the government lowering its 2019 growth forecast to between zero and 1 per cent.

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