HSBC downgrades Hong Kong on China tensions

Investment outlook cut on the back of falling property prices and souring relations with China over the Occupy Central issue.
The July 1 protest attracted a record crowd.
The July 1 protest attracted a record crowd.

HSBC has downgraded its investment outlook for Hong Kong equities on the back of tensions with China over the Occupy Central issue and the risk of falling property prices.

Although the move -- from neutral to underweight -- is a small one, it is symbolic given the city is the global bank’s historic home.

The bank is Hong Kong's biggest and in 2013 derived more than 40% of its Asia-Pacific pre-tax earnings from the city.

“We note recent concerns about negative news flow regarding the Occupy Central’ campaign,” HSBC said in its quarterly report.

More details are expected on Tuesday, with...

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