Retailers profit as consumers splash out
The retail sector is reaping more profits as consumers are increasingly willing to splurge on electronics and jewelry under current robust stock market conditions. Retail sales jumped 13 percent to HK$19.6 billion in September over the same time last year, according to the Hong Kong Census and Statistic Department.
Electronic goods and cameras proved to be the most popular with consumers. Sales for these goods soared 28.9 percent year-on-year, while luxury items like jewelry and watches came a close second, increasing 26.1 percent over a year earlier. Clothes and footwear also saw a solid increase of 23 percent.
Retail sales of commodities from department stores, furniture and clothing all posted increases of more than 10 percent, while demand for fuel only inched up 1 percent in September over the previous year.
The government attributed the rosy retail figures to strong consumer sentiment buoyed by rising incomes, an improved job market and the bullish stock market.
"Consumer spending is likely to hold up well on the back of the strong economic fundamentals. Continuous robust growth of inbound tourism should also add support to the retail business," said a government spokesperson.
The local benchmark Hang Seng Index has hit record highs in the past weeks on the back of investor sentiment over mainland capital flowing into the market and the recent spate of high-profile initial public offerings. The recent interest rate cut and the expectation that asset prices are set to inflate provided a strong boost to property stocks.
Shares in Henderson Land Development and Sun Hung Kai properties both climbed yesterday. Henderson Land rose more than 10 percent yesterday to close at HK$71.9, while Sun Hung Kai gained 4.38 percent to close at HK$147.8. Beijing-focused commercial property developer SOHO China also saw its share price jump 6.89 percent yesterday to close at HK$10.86.
Despite the stellar bull-run for property stocks and red-chips, the Hang Seng Index failed to hold at the 30000-level yesterday, closing at 29708, a gain of 0.92 percent. The Hong Kong bourse slid more than 5 percent on Monday as anticipation of the mainland direct investment scheme cooled after Premier Wen Jiabao said it could take more time to get the green light.
(China Daily 11/08/2007 page15)
