Market Insights | Hong Kong local stocks all fell, Hong Kong retail industry under pressure year-on-year, the cooling effect on the property market is gradually weakening

Zhitong
2024.06.11 05:50
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Hong Kong local stocks fell across the board, with HANG LUNG PPT, WHARF REIC, MTR CORPORATION, and LINK REIT all experiencing declines. According to data from the Hong Kong Immigration Department, during the Dragon Boat Festival holiday, a total of 3.2375 million people entered and exited Hong Kong, with a decrease in mainland visitors. Morgan Stanley expects that Hong Kong's retail sales in May will narrow the year-on-year decline to 13%. In addition, the Hong Kong private residential price index has risen for two consecutive months, but still recorded a 13% year-on-year decline. Citigroup previously published a report indicating a bearish view on the Hong Kong property industry. Property developers are eager to launch new projects, but demand still depends on interest rates. It is expected that Hong Kong property prices will fall by 10% for the whole year

According to the information from the Wise Finance app, local stocks in Hong Kong are all falling. As of the time of publication, Hang Lung Properties (00101) fell by 6.73% to HKD 6.93; Wharf Real Estate (01997) fell by 4.75% to HKD 21.05; MTR Corporation (00066) fell by 3.86% to HKD 24.9; and Link REIT (00823) fell by 3.98% to HKD 32.55.

On the news front, data from the Hong Kong Immigration Department shows that during the Dragon Boat Festival holiday from June 8th to 10th, a total of 3.2375 million people entered and exited Hong Kong. Among the inbound visitors, there were 330,800 visitors from the mainland; among the outbound visitors, there were 1.1701 million Hong Kong residents. Some analysts believe that the trend of Hong Kong residents traveling north for consumption has become a new norm, putting pressure on retail rents in the northern part of Hong Kong.

Morgan Stanley previously pointed out that Hong Kong's retail sales value in April dropped by nearly 15% year-on-year, affected by a decrease in mainland tourists, continued outbound consumption by Hong Kong residents, a high base figure, adverse weather conditions, falling short of the bank's and market expectations. The bank expects that the year-on-year decline in retail sales in Hong Kong in May will narrow to 13%.

Furthermore, on May 29th, the Rating and Valuation Department of Hong Kong announced that the private residential price index for April was 308.7 points, up by 0.29% month-on-month, rising for two consecutive months with a cumulative increase of 2.08%. However, it still recorded a 13% year-on-year decline and has not yet recovered from the initial drop at the beginning of the year. Citigroup previously published a report indicating a bearish view on the Hong Kong property industry. Due to developers being eager to launch projects at reasonable prices, but demand still depends on the current stagnant interest rates, the forecast for a 10% decline in Hong Kong property prices for the whole year is maintained

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