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The operator of Hong Kong’s famously-efficient subway system, MTR Corporation Limited (SEHK: 66), has seen its shares experience some high highs and low lows over the past year. Having built its reputation as a world-class operator of metro systems, the company also pioneered the “rail + property” business model that has made it so profitable over the past decade.
Yet as the Hong Kong protests rage on, MTR has been caught up in the furore – first by being accused by the Mainland Chinese state-backed press outlets of transporting radical protestors across the city. Then, more recently, it has incurred the wrath of protestors who now feel it has caved in to pressure by Beijing.
Either way, its shares have suffered – it was flying high earlier this year on continuously rising house prices in Hong Kong and new rail lines in the works. At one point over the past year it was outperforming the benchmark Hang Seng Index by a near-35%. Its shares have fallen sharply since mid-July but bounced back strongly this week on news of the withdrawal of the contentious extradition bill by Hong Kong’s Chief Executive Carrie Lam.
For investors, though, it highlights the inherent dangers of being invested in a company that has the potential to be caught up in political turmoil.
Source: CapIQ as of 6 September 2019
The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Hong Kong contributor Tim Phillips doesn't own shares in any companies mentioned.