Hong Kong poised to recover

But it will take time, the HSBC Global Research says.

Hong Kong will likely head toward recovery as it has eased social distancing measures and has rolled out its COVID-19 vaccination programme, the HSBC Global Research says.

The government has gradually lifted social distancing protocols following a drop in the number of new COVID-19 cases since early February.

“We believe Hong Kong is well poised to recover with the recent easing of social-distancing rules,” the report said.

Since the easing, restaurants have been allowed to resume dine-in services until 10:00 PM, whilst beauty parlours have reopened. The local retail and food service sectors are also likely to benefit from the $5,000 consumption vouchers, issued to qualified residents.

In addition, the government’s vaccination programme is also expected to usher the city toward normalcy.

As of 17 March, a total of 253,900 persons have been inoculated under the programme; of whom, 189,600 received Sinovac, whilst the remaining 64,300 received BioNTech vaccines.

The government has also expanded coverage of the priority groups to include those aged 30 and above.

“Rollout of vaccines should support the normalisation of activities, but it takes time to be back to full steam,” HSBC said

Citing the case of Macau, HSBC observed the number of visitors from Mainland China was still nearly 80% lower in January 2021, compared to a year ago. This is despite the gradual opening of its borders to Mainland China since August 2020.

“Hence, we are relatively cautious on the pace of tourists coming back to Hong Kong post border opening,” the report added.

Further, HSBC Global Research recommended to stay selective, noting their preferred stocks are UMH, CDC, and BJTRTCM.

In particular, HSBC said UMH remains attractive as it is seen to have enough support before tourists return.

“We believe local consumers in Hong Kong, the resilience of its medical services and its active expansion in mainland China should provide sufficient support for its business before the return of tourists,” HSBC said.