Hong Kong protests escalate
Yesterday, protests in Hong Kong over the extradition bill escalated as riot police used rubber bullets, tear gas, and pepper spray on protestors. 80 people were injured during the protests. There were reports that some government offices shut down amid the protests. As the city came to a halt, further debate on the bill was suspended again until further notice.
Hang Seng reacts
Hong Kong’s Hang Seng Index opened lower today and fell sharply in early trade in response to the political situation in the city. As life started getting back to normal in Hong Kong, the bulls returned, and the index maintained upward momentum. The Hang Seng closed almost flat at the end of the session.
Yesterday, the iShares MSCI Hong Kong ETF (EWH) lost 2.26%. The ADRs of AIA Group (AAGIY), which is the ETF’s largest component, fell 2.88%. At a PE ratio of 39x, the AIA ADR is trading at a premium to AIA Group’s stocks listed in Hong Kong.
Japan’s Nikkei 225 continued to slide today. The index lost 0.46% after opening lower and falling through the first half of the session. The broader TOPIX Index fell 0.82%. Japan’s tertiary industrial activity rose at a higher-than-expected rate of 0.8% in April 2019.
Yesterday, the iShares MSCI Japan ETF (EWJ) lost 1.11% on the NYSE Arca even though its largest component, Toyota Motor Corporation (TM), gained 0.55%. Toyota accounts for 4.15% of the ETF’s total holdings. Sony (SNY), which the ETF is also invested in, lost 0.88% on the NYSE yesterday.