Estimated $3 billion to $4 billion moved as violence escalated in the city Image Credit: Reuters

Hong Kong: The potential benefit to Singapore from the turmoil in Hong Kong: $4 billion.

That’s the upper end of an estimate from Goldman Sachs Group Inc of the money investors have moved to Singapore amid escalating political protests in the former British colony. The New York-based bank estimated that there has been a maximum outflow of Hong Kong dollar deposits totalling $3 billion to $4 billion to Singapore, an alternative financial centre for the region, as of August.

Local-currency deposits declined in August by 1.6 per cent from the previous month, the biggest drop in more than a year, to about HK$6.84 trillion ($873 billion), the Hong Kong Monetary Authority said earlier this week. Its chief attributed that slump to a dearth of initial public offerings and said there’s been a slight increase in the first three weeks of September. That was before a further escalation in violence in the city.

“We found modest net outflow from HKD deposits in Hong Kong and modest net inflow of FX deposits in Singapore,” analysts Gurpreet Singh Sahi and Yingqiang Guo wrote in a note to investors late Monday. “We believe the debate on Hong Kong outflow/liquidity will remain active and the data points for September (and beyond) critical in shaping the same.”

Hong Kong police groups are urging the city to impose curfews and invoke other powers under a controversial colonial era-emergency law, as Chief Executive Carrie Lam struggles to control escalating unrest. Waves of rallies across Hong Kong led to widespread clashes between protesters and police on the National Day holiday Tuesday, with an officer shooting and wounding a demonstrator for the first time since unrest began almost four months ago.

Hong Kong’s powerful Public Order Ordinance, passed during a wave of riots in 1967, lets the government establish curfews and close areas from public access. The Emergency Regulations Ordinance of 1922 goes further, allowing the chief executive to make “any regulations whatsoever” to ensure public security, including censorship, snap arrests and property searches and seizures. That ordinance hasn’t been used in more than a half century.