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Pro-democracy sweeps majority seats in HK election

Pro-democracy sweeps majority seats in HK election

Hong Kong’s political climate is set to change dramatically after pro-democracy candidates won the majority of seats in a district council election on Sunday.

According to the latest vote count, pro-democracy candidates won 201 seats, whereas pro-establishment took only 28 seats. With a record voter turnout of 2.94 million people, the result indicates that there will be a significant shift away from the pro-establishment camp that has dominated the district council landscape for years.

Such a sweeping victory clearly expresses Hong Kong citizens’ pursuit for democratic changes, despite months of violent clashes that have sent the city’s economy into a technical recession. The result might not be market-friendly as it is set to challenge Carrie Lam’s leadership and bring up political uncertainties. But it could also mark a turning point in stopping the violent clashes.

Alibaba will debut on the Stock Exchange of Hong Kong (HKEX) on Tuesday, pricing at HK$176 each. With HK$101.2 billion raised, Alibaba’s HK IPO is the single largest stock offering globally this year. Only 10% of the shares were offered in the public trench and they have received overwhelming demand from retail investors. The institutional trench was oversubscribed by more than three times.

Despite recent market turbulence and Hong Kong’s surprising election result, Alibaba’s IPO is likely to remain robust on its first day of trading. It offers investors in HK a rare chance to gain exposure to the world’s largest e-commerce and technology giant, with future growth potential in cloud computing, AI and fintech. The IPO has also helped HKEX to reclaim the top position in the global IPO market this year, surpassing New York and Nasdaq in terms of total funds raised. Including Alibaba, HKEX’s main board has raised US$34.05 billion this year. 

US futures rose on Monday morning, as trade optimism buoyed market sentiment. China has raised penalties on Intellectual Property (IP) theft over the weekend, addressing one of the most critical issues in the US-China trade talks. Meanwhile, President Trump said he was "very close" to a trade pact with China and he is hesitant to sign the Hong Kong bill.

China’s chief trade negotiator Liu He expressed cautious optimism towards a deal, suggesting the opportunity remains on the table. Ultimately, it depends on how much the US is willing to rollback on tariffs and how many trade concessions Beijing will be willing to offer.

Hong Kong 50 - Cash chart


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