Hong Kong’s first increase in trade taxes since 1993 Pummels Stocks

Photographer: Paul Yeung / Bloomberg

Hong Kong revealed its first stamp duty increase in stock trading since 1993, triggering a broad sale in the $ 7.6 trillion market and sending shares on the city’s stock exchange to its biggest drop in more than five years.

The planned increase in trade tax from 0.10% to 0.13% was part of a series of new measures announced in the Hong Kong budget, which included increased spending to help residents cope with the pandemic. Even with the city’s economy plummeting last year, stock prices and volume of business emerged amid a global market boom.

Hong Kong’s Hang Seng benchmark sank 2.6% at 1:41 pm local time, led by a 7.8% decline in Hong Kong Exchanges & Clearing Ltd. Wednesday.

“The impact will be significant,” said Kingston Lin, managing director of the asset management department at Canfield Securities in Hong Kong, before the announcement by the city. “The market is doing very well and will certainly bring more revenue to the government. But the higher transaction costs will be a concern for the switch ”.

Hong Kong foreign exchange sinks more since 2015

The government announced spending measures of more than HK $ 120 billion ($ 15.5 billion) to alleviate the economic hardship of city residents.