Will Hong Kong's shopping boom meet another devastating end?

The recent surge in retail sales may not even last for the second half of 2018.

Bloomberg reports that although Hong Kong investors have regained confidence in the retail market by plowing money into consumer stocks, the shopping spree may not be easily sustained in the long run, with some analysts pegging a downturn taking place as early as the second half of 2018.

Consumer stocks like Sa Sa International and Luk Fook have been amongst the top gainers for local companies on the Hang Seng Composite Index, outperforming the broader gauge by more than nine times since the index plunged last February.

Also read: Retail demand recovers in Q1 as brands ramp up leasing activity

However, the recent recovery runs parallels with the surge in 2010 to 2014 as retail sales rose before slumping suddenly as the yuan tumbled and Beijing’s anti-corruption campaign halted luxury spending.

“Currency moves may have helped but that’s not something that is expected to continue," said Toshihiko Takamoto, a money manager at Asset Management One. Takamoto believes that history just might repeat itself as beneficial currency tailwinds may reverse in the second half of the year as the yuan weakens against the dollar, making Hong Kong goods less cheap and attractive for Mainland shoppers.

Here’s more from Bloomberg:

Also Read

Patek Philippe Salons exhibit largest “Rare Handcrafts” collection

Local spending trends cast a shadow on Hong Kong retail rent growth

Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!

I want to download the media kit