The retail market in Hong Kong continues to be sluggish
Rating agency Moody’s pointed out that if Hong Kong’s demonstrations and Sino-US trade disputes have not subsided, this year’s retail sales will decline year-on-year, which will exceed the decline of 3.7% in the anti-corruption period in the Mainland in 2015. It is also worse than during the 2014 occupation campaign.
The amendment of the Fugitive Offenders Ordinance has triggered a series of demonstrations and police-civilian conflicts for two months
The Government has not proposed specific plans to resolve the crisis. The demonstrations have spread to various districts, affecting the normal operation of shopping malls and shops. Strike. Moody’s believes that the impact of this incident on the retail industry is greater than that of “occupying the middle” in 2014. The occupation movement lasted for 75 days, and the retail sales in the same year fell 0.2% year-on-year.
The retail market in Hong Kong has experienced a sharp deterioration in recent months. Moody’s said that the decline in retail sales will have a negative impact on the credit situation of retail property operators in Hong Kong. The revenue sources of these operators are mainly from the rents of retailers and some of them. The turnover related to the sales of merchants is divided into rents.
The Census and Statistics Department announced earlier this month that the total value of retail sales in June fell for five consecutive months, down 6.7% year-on-year, and the expected difference fell by 1.9%. A Government spokesman explained at the time that the decline in retail sales in June was related to the trend of prudent local consumer sentiment and a slowdown in the number of visitors to Hong Kong. The government also said that if the demonstrations continue, it will further drag down the retail business. The Chairman of the Hong Kong Retail Management Association, Mr. Xie Qiuyi, mentioned that the current retail market is worse than that of “occupied Zhong” because the demonstrations are spread across the districts.
Corporate credit rating is not affected
However, Moody’s believes that the relevant negative factors have limited impact on companies that have received credit ratings from the bank, as these companies have a diversified business mix and a moderate share of rent, and are financially sound and have a healthy liquidity to effectively maintain the existing Credit rating.