HK Retail Sales Rise, Hang Seng Drops 3%

123jump.com Staff
03 Oct, 2008
New York City

Hong Kong retail sales in August rose 10.4% and in the first eght months gained 15% in value and 8.3% in volume. Hang Seng index declined nearly 3% as persisten troubles in the U.S. credit markets will slow down the China region economy.

[R]6:00AM New York, 6:00PM Hong Kong - Hong Kong August retail sales gain 10.4% to HK$22.8 billion.[/R]

Market Sentiment

In Hong Kong Hang Seng index fell 2.90% or 528.71 to 17,682.40, and China Enterprises of Hong Kong listed mainland shares, or H shares, dropped 3.41% or 317.78 to 9,013.27.

Daily turnover on main-board was HK$53.3 billion from HK$69.7 billion yesterday.

Hong Kong Retail Sales 10.4% to HK$22.8 billion in August

The Hong Kong Census and Statistics reported on its Web site yesterday that retail sales climbed 10.4% to HK22.8 billion from the comparable period a year earlier.

Statistics indicate that total retail sales in the first eight months of the year gained 15% in value and 8.3% in volume buoyed by a 21.6% increase in electrical and photographic equipment and a 14.7% growth in furniture and fixtures.

In addition sales volumes of fuels, apparel, food, alcohol and tobacco, commodities in department stores and miscellaneous consumer goods also rose between 7.8% and 1.2%.

Conversely the sales volume of motor vehicles and parts and footwear, allied products and other clothing accessories shed 14.8% and 4.1% correspondingly, while miscellaneous consumer durable goods dropped 0.9%.

However, the department is concerned that the turmoil in the global market will adversely affect consumer sentiment, asset markets and the general health of the domestic economy.

HKMA to Consider Further Interventions in Financial Markets

Xinhua News Agency reported on its Web site yesterday that Hong Kong Monetary Authority Chief Executive Joseph Yam published in his weekly Viewpoint column that the city is mooting additional measures that can help the “ turbulent liquidity conditions”.

Yam commented, “To contain or end a financial crisis there is a need for the authorities to provide liquidity to the financial system and facilitate the re-capitalization of financial institutions.”

Gainers & Losers

Hong Kong stocks fell led by financial stocks on fears over the exposure of Hang Seng Bank to Washington Mutual.

Hang Seng Bank dropped 5.9%,ICBC slid 3.8% and China Construction Bank dropped 4.4 %.

Commodities stocks declined on falling prices. Petrochina declined 5.3%, CNOOC shed 5.9% and China Shenhua Energy plunged 5.2%.

China Resources Logic bucked the downtrend by rising 30% on news that it will buy 22 urban gas projects from its parent company and explore prospects of growth after the scheduled acquisition of China Resources Gas this month.

China Overseas Land Investment rose 2% after regional governments in China unveiled measures to strengthen the sector.

Cathay Pacific tumbled 6.2% after Deutsche Bank downgraded the airline''s stock to sell from hold citing slowing demand from its premium customers amid a slowdown in the Hong Kong and Chinese economies.

Cathay''s traffic growth has declined to 7% in August compared to a year ago from 20% in December 2007, Deutsche Bank said.

Shares in BYD Electronics, which have surged more than 2.5 times in value since billionaire investor Warren Buffett''s Berkshire Hathaway picked up a 10% stake in its parent last weekend, slid 18.9 percent as investors moved in to lock in gains. Deutsche bank downgraded the stock to hold from buy purely on valuations.

Parent BYD Company dropped 13.3%.