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Hong Kong ETF volume hits 5-year high

Trading in the largest ETF tracking Hong Kong stocks jumped to a five-year high as protests in the city intensified.

The iShares MSCI Hong Kong ETF (EWH) saw its volume soar to 25 million shares on Tuesday in New York — the most since August 2014, according to data compiled by Bloomberg. Since demonstrations escalated in June, the $1.4 billion fund has lost about 40% of its assets.

Buildings stand illuminated at dusk in Hong Kong, China. Photographer: Brent Lewin/Bloomberg
Buildings stand illuminated at dusk in Hong Kong, China. Photographer: Brent Lewin/Bloomberg

After protesters brought the city’s airport to a standstill on Monday, investors grew increasingly alarmed by the fallout from 10 weeks of anti-government rallies that showed no sign of letting up.

The short-term worry is that Hong Kong’s economy is headed for a recession as local turmoil combines with the U.S.-China trade war to pummel retail sales, weigh on real estate prices and sink the city’s $4.9 trillion stock market.

After hitting the lowest level since January, EWH climbed on Tuesday as the Trump administration de-escalated its dispute with China — sparking demand for risk assets that had been under pressure. — Additional reporting by Tom Lagerman