Hong Kong consumer stocks benefit from Shanghai stimulus plan

By Yongchang Chin

Hong Kong-listed consumer stocks are higher in early trade as sentiment is boosted by the Shanghai government’s plan to ease Covid-19 restrictions on June 1 as the number of daily cases falls.

“We believed that there will be a recovery in consumption after the unlock,” say analysts at brokerage house KGI Securities.

The local government also announced a series of supportive measures, including cutting rent and property taxes for businesses and providing subsidies for water, electricity and natural gas bills, state media outlet Xinhua reported over the weekend.

“Measures will also be taken to stabilize foreign capital, stimulate consumption and expand investment,” it said.

Consumer stocks pull the benchmark Hang Seng index higher Monday morning, led by apparel group Li Ning Co., hotpot chain Haidilao International Holding Ltd. and brewer China Resources Beer (Holdings) Co., which rose 8.2%, 6.4% and 6.3%, respectively. , respectively. The HSI is up 2.2%.

Analysts at KGI Securities say this presents a buying opportunity and sees China Resources Beer as particularly attractive. Not only has the brewery’s stock fallen sharply due to the Covid-19 outbreak, but earnings per share are expected to rise 26% in 2023, they say. Shares are down 26% so far this year.

The measures should be supportive of Hong Kong stocks in general as they may allay some concerns about the risks of Covid-19, says IG market strategist Yeap Jun Rong.

However, Mr Yeap notes that previous fiscal measures “were met with only a lukewarm reaction from markets, suggesting some reservations may remain.” This is because China’s “strict stance on viruses suggests that everyone [future] Outbreaks are still faced with severe economic constraints,” he says.


Write to Yongchang Chin at yongchang.chin@wsj.com

https://www.marketwatch.com/story/hong-kong-consumer-stocks-gain-on-shanghai-economic-recovery-plan-271653878951?rss=1&siteid=rss Hong Kong consumer stocks benefit from Shanghai stimulus plan

Brian Lowry

InternetCloning is an automatic aggregator of the all world’s media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials, please contact us by email – admin@internetcloning.com. The content will be deleted within 24 hours.

Related Articles

Back to top button