Commentary on Political Economy

Saturday 9 December 2023



The True Face of the Anti-Israel Movement


American Muslims for Palestine then took down the full video, and Mr. Awad now claims a “hate website selected remarks from my speech out of context and spliced them together to create a completely false meaning.” But we got the video before Mr. Awad’s ally hid it, and here’s what CAIR’s leader had to say:

“The people of Gaza only decided to break the siege, the walls of the concentration camp, on Oct. 7. And yes, I was happy to see people breaking the siege and throwing down the shackles of their own land, and walk free into their land, that they were not allowed to walk in. And yes, the people of Gaza have the right to self-defense, have the right to defend themselves. And yes, Israel, as an occupying power, does not have that right to self-defense.”

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The crowd applauded, and not a word in Mr. Awad’s speech qualified his pleasure with Oct. 7, justified as “self-defense.”

Democrats and media have long treated CAIR as a primary political spokesman for Muslim Americans. In late October the White House invited Mr. Awad to convey Muslim concerns about the war to the President. In May the Biden Administration included CAIR as a partner in its Strategy to Counter Antisemitism. The White House has now removed CAIR from that document and condemned Mr. Awad’s remarks.

On stage Mr. Awad accused Israel of buying “corrupt members of Congress,” concluding, “We have to free so many people from the shackles of AIPAC [the American Israel Public Affairs Committee] and its affiliates who have sold the soul of America.” Complaining of Mr. Biden’s betrayal, Mr. Awad asked, “For how much? It is for how much AIPAC and its affiliates have been controlling the U.S. government and the U.S. Congress. . . . Unless we free Congress, we will not be able to free Palestine.”

There it is, the hoary conspiracy that justice—however defined—could be achieved if only the Jews weren’t secretly shackling and manipulating the powers that be. Maybe that’s easier for Mr. Awad to accept than the truth: The American people support Israel and oppose Palestinian terrorism.

But CAIR and its allies have influence, and Mr. Awad said the White House had begun to listen. “When we say ‘if there is no cease-fire, there will be no votes for you in 2024 elections,’” he said, “we started to see the tone changing—and the position changing.”

Mr. Awad’s co-panelist was Osama Abuirshaid, director of American Muslims for Palestine, the leading sponsor of SJP on campus and an organizer of anti-Israel protests across the country. Mr. Abuirshaid told a rally Dec. 1: “What they alleged that happened on Oct. 7 turned out to be a lie. Most of the [Israeli] civilians were killed by their own army.” Will Democrats bend on Israel to people like this?

Near the end of Mr. Awad’s speech, he said, “I ask young people: Be wise. You are not in Palestine. You are not in Gaza. The language there doesn’t work here.” You know, less on the Jews and violence, and more on human rights. He should have taken his own advice.



Hong Kong’s Stock Slump Triggers Wave of Brokerage Closures

  • The Hang Seng Index is set for a record fourth year of losses
  • Liqiuidity has dried up amid foreign disinterest, IPO drought

Hong Kong’s government has taken steps to arrest the downturn and stimulate trading. 

Photographer: Paul Yeung/Bloomberg

A historic slump in Hong Kong’s $4.6 trillion stock market is rippling through the city’s financial industry.

Thirty local brokerages have closed down this year, after a record 49 shut up shop in 2022, according to Hong Kong stock exchange data. That comes as Wall Street banks lay off dealmakers due to a plunge in initial public offerings.

The Hang Seng Index is heading for a fourth year of declines, the longest losing streak in the gauge’s history, and fell to an one-year low this week. Average daily turnover is down 14% compared with the five-year average and the IPO market having its worst year since 2001.

The prolonged slump and the job losses are adding to questions about the future of the city’s position as Asia’s top international finance center in the wake of Hong Kong’s extreme pandemic curbs and Beijing’s imposition of national security legislation.

“This wave of shutdowns and layoffs at brokerages is the worst I’ve ever seen,” said Edmond Hui, chief executive officer of Hong Kong-based brokerage Bright Smart Securities. “The key lies in improving the liquidity of the market. Now everyone is struggling. I simply don’t see any light at the end of the tunnel.”

Small-and medium-sized brokerages, whose revenue mainly comes from trading commissions and margin businesses, are bearing the brunt of the market downturn. According to a survey of local brokers by the Hong Kong Securities Association earlier this year, more than 72% suffered losses last year, with at least a quarter planning to scale down their operations this year.

Hong Kong stocks have the widest bid-ask spreads — the price difference between offers to buy and sell stocks — in Asia Pacific markets, said Tony Cheung, an execution consulting specialist at Instinet. That’s increased trading costs for institutional investors, he added.

Despite analyst projections at the start of the year that Chinese shares would see a recovery after the country ended its Covid Zero restrictions, investor sentiment turned persistently downbeat. A struggling economy, weak consumption, strained US-China ties and a property crisis sent foreign funds fleeing.

The lack of liquidity shows “institutional interest in Hong Kong and China is declining to a new low,” said Qi Wang, UOB Kay Hian chief investment officer in wealth management. “Global investors have divested a big chunk of their Hong Kong holdings in the last two years. Many now consider China ‘irrelevant’ from a global portfolio view.”

A drought in deals is adding to the sense of a market in trouble. This year is poised to be the worst for Hong Kong debuts since 2001, just after the dotcom bubble burst, with $5.1 billion of IPOs. That’s a fraction of the $52 billion raised three years ago, and down 84% from the past 10-year average of $31 billion.

Hong Kong Bankers Have Lots of Free Time, Anxiety as Deals Slump

Just last month, Alibaba Group Holding Ltd. shocked investors by terminating plans to spin off and list its $11 billion cloud business. The company, which cited US restrictions on chip sales to China for the reversal, said it’s also suspending a listing for the popular grocery business Freshippo.

Banks are downsizing as a result. In the past year, Wall Street banks including Goldman Sachs Group Inc. and Morgan Stanley have conducted multiple rounds of layoffs in Hong Kong. UBS Group AG cut about two dozen investment bankers in Asia, mainly China-focused roles based in Hong Kong and including several managing directors, Bloomberg News reported in October.

“This hiring market in 2023 is probably the toughest hiring market I would say since the global financial crisis,” said John Mullally, a Hong Kong-based managing director at recruiting firm Robert Walters, referring to the local financial services industry in general. “In 2024, I think there will be more cuts.”

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The ongoing slump, particularly in a year when global equity markets have gained, is turning Hong Kong into an also-ran. Japan’s stock market is now $1.5 trillion larger than Hong Kong’s — the biggest gap since 2009. The Topix has surged 23% this year, compared with a 17% retreat by the Hang Seng Index. Hong Kong is also at risk at being displaced by India, which is just $518 billion less, around the smallest discount on record based on data going back two decades.

Hong Kong’s government has taken steps to arrest the downturn and stimulate trading. This includes reversing a stamp duty hike on stock trades introduced in 2021, as well as plans to ensure markets stay open during severe weather such as a typhoon.

Yet local officials can do little about the city’s high borrowing costs, which follow US moves due to the local currency’s peg to the greenback, or the weakness in mainland China’s economy.

“Cutting stamp duty is only a cosmetic change,” said Chi Lo, investment strategist for Asia Pacific at BNP Paribas Asset Management. To revive Hong Kong’s stock market, US monetary policy needs to shift from tightening to loosening and Beijing needs to introduce more aggressive easing, he added.

Wall Street banks are lowering their expectations on Chinese stocks. Morgan Stanley in August downgraded China to equal-weight, while last month Goldman Sachs cut its recommendation on Chinese stocks listed in Hong Kong due to modest earnings growth.

“The length and severity of this cyclical downturn of the Hong Kong market could continue to weigh on its status as a global financial center,” said Vivian Lin Thurston, a portfolio manager at William Blair Investment Management. “Only if and when the macro and underlying corporate fundamentals start to improve, could it see improved performance and increased liquidity.”