The Hang Seng Index (HSI) continued to be troubled by the continuing protests in Hong Kong. The Hong Kong market was shut on Monday in conjunction with the Chung Yeung Festival and rose 0.3% upon reopening yesterday, clawing back some of the losses from last Friday following the announcement of the anti-mask law.

Anti-mask Law Came Into Effect

Last week, the Hong Kong market was shut on Tuesday (1 Oct) in conjunction with the National Day holiday. However, protests continued through the week and escalated further on Wednesday when an 18-year-old protester was injured with a shot to the chest as he swung a metal rod at a riot policeman (South China Morning Post (SCMP), 2 Oct).

On Thursday, news surfaced that Hong Kong was looking to ban face masks at public gatherings to stop protesters from hiding their identities. During a press release on Friday evening, chief executive Carrie Lam announced that the anti-mask law would come into effect on Friday night (SCMP, 4 Oct) – the HSI plunged 1.1% to 25,821 points on that day.

Since the anti-mask law was imposed, at least 77 people have been arrested in connection to it, with the police using 367 rounds of tear gas, 106 rubber bullets, 15 beanbag rounds and 30 sponge bullets in clashes over the long weekend (SCMP, 8 Oct). Further according to this article by SCMP, there were reportedly 213 cases of vandalism of shops, MTR facilities, properties and buildings, and 80 reports of damage to traffic lights (SCMP, 8 Oct).

A violation of the anti-mask law can lead to a maximum fine of HKD25K (~RM13.4K) and one year in prison. Officers may stop and require any person in public to remove their mask, with failure to comply resulting in a fine of HKD10,000 (~RM5.4K) and 6 months in prison.

Source: Macquarie Research - 9 Oct 2019