Coronavirus hammers travel, tourism stocks in Hong Kong

Coronavirus hammers travel, tourism stocks in Hong Kong
Passengers wear mask to prevent a new coronavirus outbreak at a Mass Transit Railway (MTR) subway train station in Hong Kong, China, January 29, 2020. (Reuters)
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Updated 29 January 2020

Coronavirus hammers travel, tourism stocks in Hong Kong

Coronavirus hammers travel, tourism stocks in Hong Kong
  • The crisis comes just as the city was trying to recover from the impact of the China-US trade war

HONG KONG: Travel, tourism and property stocks tumbled in Hong Kong on Wednesday as panicked investors fretted over the economic impact of the virus in China that has now killed at least 132 and infected more people than SARS on the mainland.

Dealers returned to trading floors for the first time after the lunar new year break and instantly began to sell, joining a global retreat that has wiped more than a trillion dollars off valuations.

The crisis comes just as the city was trying to recover from the impact of the China-US trade war and months of sometimes violent protests that drained confidence in the local economy.

At the end of the day, the Hang Seng Index was down 2.8 percent, though that was an improvement on the first few minutes — which saw it lose more than 3 percent —as traders took heart from a strong lead by Wall Street and Europe.

The outbreak carries echoes of the SARS crisis of 17 years ago, which paralysed regional travel and battered local economies. Chinese tourist numbers then fell by around a third.

The latest outbreak is expected to deal a massive blow to China’s already-fragile economy, coming during the lunar new year holidays when millions criss-cross the country and spend billions of dollars. It also comes just as data indicated some sort of stability in the economy after a long running slowdown.

Firms linked to travel and tourism took a beating as big-spending Chinese tourists stayed at home with Beijing clamping down on people’s movement.

Macau casino operators, which derive most of their cash from mainland gamblers, tanked.

Sands China dropped 5.6 percent, while Wynn Macau and Galaxy Entertainment dropped 5.2 percent and Wynn Macau lost 4.1 percent.

Among property firms, New World Development retreated 3.4 percent and Henderson Land was 2.7 percent lower.