HK - Economic Data & News 01 (May 08 - Sep 14)

[millionairemind]

June 1, 2009
HK retail sales slump 4.4%
HONG KONG - HONG Kong retail sales slumped 4.4 per cent year-on-year in April, the government said on Monday, predicting that the figure was unlikely to improve in the near future.

The value of total retail sales in April amounted to HK$27.1 billion (S$5 billion), the Census and Statistics Department said in a statement.

After netting out the effect of price changes over the same period, the volume of total retail sales decreased by 5.5 per cent in April compared with a year earlier.

The department said that retail sales staged a relative improvement in April, with the year-on-year decline tapering quite visibly in April from March, when the decrease was 7.7 per cent.

It added the rebound in the local stock and housing markets, as well as the stable performance of inbound tourism in April, contributed to this.

However, it also noted that prospects in the near term were shaky because there was likely to be a fall-out from the impact of the human swine flu on tourism, and hence the retail business. -- AFP

[millionairemind]

June 12, 2009, 6.43 pm (Singapore time)

HK Q1 industrial production index down 10.2% on yr

HONG KONG - Hong Kong's index of industrial production fell by 10.2 per cent in the first quarter of 2009 compared with the same period last year, the Census and Statistics department said on Friday.

Textiles output was down 22.5 per cent and output of metal, computer, electronic and optical products, machinery and equipment fell by 13.2 per cent.

Food, beverages and tobacco output decreased 5.3 per cent, while paper products, printing and reproduction of recorded media output was down 8.2 per cent.

Production of garments and apparel, except footwear, dropped 31.2 per cent. -- REUTERS

[millionairemind]

June 20, 2009, 11.01 am (Singapore time)

HKMA sells HK$1.55b to keep HK$ in trading band

HONG KONG - Hong Kong's central bank, the Hong Kong Monetary Authority (HKMA) confirmed on Saturday it injected HK$1.55 billion (US$200 million) into the money market during New York trading hours on Friday to stem an appreciating Hong Kong dollar and keep it within its fixed trading band.

The Hong Kong dollar was at the top of its trading band at 7.7500 when HKMA intervened.

It was the first intervention by the monetary authority since mid-May.

According to data on Reuters page , the latest intervention will lift the aggregate balance - the sum of balances on clearing accounts maintained by banks with the HKMA - to HK$215.91 billion by June 23.

The Hong Kong dollar is pegged at 7.80 to the US dollar but can trade between 7.75 and 7.85 to the US dollar. Under the linked exchange rate mechanism, the HKMA is obliged to intervene in the market to keep the trading band intact if the currency hits 7.75 or 7.85. -- REUTERS

[eauyong]

HK-Shenzhen ties renewed
6/24/2009,

Co-operation between Shenzhen and Hong Kong remains on track despite the fall of mayor Xu Zongheng , his successor Wang Rong said in a visit to Hong Kong to renew contacts. Mr Wang said that since co-operation between the two cities was "very important", he had decided to pay Chief Executive Donald Tsang Yam-kuen a visit 10 days after he was appointed as acting mayor of Hong Kong's neighbouring city.

[millionairemind]

Hong Kong’s Economy May Have Returned to Growth (Update1)
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By Nipa Piboontanasawat and Kevin Hamlin

July 6 (Bloomberg) -- Hong Kong’s economy may have returned to growth in the second quarter as declines in exports eased, Financial Secretary John Tsang said.

“On a quarter-on-quarter basis, there is a large chance that there may have been growth,” Tsang told legislators today. Year-on-year, the economy’s contraction was likely smaller than in the first quarter, he said.

Hong Kong’s export declines slowed in April and May as the global economy showed signs of stabilizing. Unemployment, which is at a three-year high of 5.3 percent, is under pressure to keep rising, Tsang said.
http://www.bloomberg.com/apps/news?pid= ... 9OyKz0XNB0

[winston]

And how is this gonna affect the HK banks including DBS ?

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Hong Kong June bankruptcies surge 89 pct yr/yr

HONG KONG, July 17 (Reuters) - Bankruptcy petitions in Hong Kong accelerated in June, surging 89 percent from a year earlier, government data showed on Friday, contrasting with other data suggesting the economy may be bottoming out.

Petitions also rose on a monthly basis after declining for the previous two months. Bankruptcy petitions totalled 1,619 last month, up from 857 a year ago and rising 14 percent from 1,417 in May, although monthly figures are not seasonally adjusted.

The annual pace of increase was much faster than in May when petitions rose 54 percent from a year earlier. That indicates the economic situation remains challenging despite recent data showing exports shrinking at a slower pace and unemployment rising less sharply.

Hong Kong's economy tipped into recession a year ago and the government has forecast it will contract by up to 6.5 percent this year, although economists expect it to improve in the second half.

[millionairemind]

Aug 9, 2009, 7:25 p.m. EST
Joseph Yam's latest warning

HONG KONG (MarketWatch) -- This year we have witnessed a succession of warnings from industry leaders and regulators about the risks of a financial bubble in Hong Kong. But as the market climbs ever higher, these warnings fade to background noise.

Last week, Joseph Yam, the head of the Hong Kong Monetary Authority, said there were risks of an asset bubble from surging money flow. In a city-state that lives by the pulse of the stock market, the surprise was that Yam's comment was relegated to the inside business pages of the leading English daily -- the South China Morning Post. Forget bear-market rallies, the hot story now is the new issues bonanza. But should these warnings get more attention?

One explanation for the remarks is that Yam is being extra vigilant in the remaining couple of months before he steps down as Hong Kong's de facto central banker. He can retire with a catch all get-out: "Don't say I didn't warn you."

But his warnings are coming thick and fast.

Back in February, he was telling local legislators to brace for Financial Tsunami, Part II. By May, he had switched his attention from a credit crunch to warning about an asset bubble. To be fair, in that period the Hang Seng Index also underwent a major turnaround, rising from 11,000 in March to 17,000 in May, and are now north of 20,000.

This time he highlighted that Hong Kong's monetary base -- formed by notes in circulation, the aggregate balance of the banking system, and Exchange Fund paper -- more than doubled to 771 billion Hong Kong dollars ($99.5 billion) at the end of last month from 324 billion Hong Kong dollars a year earlier. His concern is this surge in hot money inflows.

"We are mindful of the potential negative impact that asset-price bubbles, if they were to occur, could have on financial stability," he said.

The problem is that after such a large come-back in property and stock values in Hong Kong, prices could reverse if these liquidity inflows suddenly retreat.

But Yam can do little to stop bubbles forming. Thanks to the 26-year-old Hong Kong dollar peg, Hong Kong must follow U.S. interest rates and the level of the greenback. If as many predict, the U.S. dollar is heading lower, the Hong Kong dollar must follow.

If we go back to March when Yam made his first warning about money inflows and bubbles, he was hardly helped by HSBC (HK:5 86.40, +2.60, +3.10%) (HBC 55.17, -0.33, -0.60%) , the dominant local bank. It responded to its swelling deposit base by slashing its deposit rate by 90% to 0.001%, effectively pouring fuel on the fire.

Lending rates are also at rock bottom. The continually low Hibor rates -- the three-month at 0.20% last week -- mean incredibly cheap mortgage loans. In addition to low Hibor base mortgages, banks are offering effective mortgages as low as 1.9% to 2.5%, thanks to big discounts from prime.

This time, Yam says he can take new measures to command banks to restrict their lending, perhaps borrowing a trick from China's unorthodox monetary tactics.

Still, taking a step back, this Hong Kong situation all does seem rather an anomaly. In much of the rest of the world, central bank chiefs are turning themselves blue in the face exhorting banks to lend.

Given the number of bubble cycles Hong Kong has been through in its recent past, few expect a serious policy effort to stop it.

The government, after all, is arguably the biggest bubble speculator in town, as it owns the largest land-bank. It is as keen to sell at the top of the market as any developer tycoons.

But for many businesses and the wider population who are not hooked or skilled at asset trading, living in the manic state of a perennial bubble economy is a pain. One year, the worry is run-away prices -- six months later it's deflation. Now it's back again to rising prices. The upshot is everyone from a sole trader to a school teacher needs the savvy of a Wall Street trader to navigate living in this rollercoaster economy.

To question if this economic model is sustainable, we must come back to the Hong Kong dollar peg itself. Last week speculation mounted that money inflows are merely betting on the currency re-pegging higher against the dollar, rather than any particular asset class, after currency forward rates moved higher.

The consensus is that we would need a much bigger, more serious bubble before meddling with this sacred cow. But perhaps we are nearer to that endgame than many think.

Although Yam's warnings may sound like crying wolf, they are worth listening to. He is likely to be right, but just like most things with the market -- it's a matter of timing

[millionairemind]

August 18, 2009, 5.41 pm (Singapore time)

Hong Kong's unemployment remains at 5.4%

HONG KONG - Hong Kong's unemployment remained at 5.4 per cent between May and July this year, official data showed on Tuesday, although the government warned the figure may rise as graduates enter the labour market.

The seasonally adjusted jobless rate was the same as that recorded for the April-June period and beat a median 5.5 per cent forecast of 10 economists surveyed earlier by Dow Jones Newswires.

The number of jobless increased by around 10,800 to 213,800 in the three months ending July, while the workforce increased by around 9,800 to an all-time high of 3,719,000, according to the Census and Statistics Department.

Matthew Cheung, Secretary for Labour and Welfare, said in a statement that while the labour market has displayed resilience amid the economic climate, unemployment may rise as school leavers and graduates enter the job market.

Business sentiment remained cautious while employers were still hiring conservatively, he said.

'Although the labour market showed signs of stabilisation in the second quarter in tandem with the improvements on both domestic and external fronts, the unemployment rate will continue to face upward pressure,' he said.

'As the entry of fresh graduates and school leavers into the labour market usually peaks in August, the pressure on employment is expected to be fully reflected in the next two months.' -- AFP

[millionairemind]

Aug 25, 2009
HK exports down 19.9%

HONG KONG - HONG Kong exports plunged 19.9 per cent year-on-year in July, as overseas demand for Chinese goods remained subdued despite talk of a global economic recovery, the government said on Tuesday.

The total value of shipments dropped to HK$212.3 billion (S$39.3 billion), the Census and Statistics Department said in a statement.

The decline was significantly bigger than the 5.4 per cent year-on-year drop in June, when the government recorded the first single-digit fall in seven months.

For the first seven months of the year, the value of total exports fell 17.7 per cent from the same period in 2008 as the global slump hit southern China's manufacturing heartland, which ships many of its products through Hong Kong.

The sharpest drop in the month was recorded for exports to Malaysia, Britain and Germany, which were all down about 30 per cent year-on-year.

The value of imports decreased 17.8 per cent to HK$233.9 billion in July.

A government spokesman said the widened decline in July was a regional phenomenon, as the figure in many other Asian economies continued to be larger than Hong Kong.

The spokesman added the fall suggested that the recovery path would be 'rather uneven in the period ahead given that demand in overseas markets has yet to show visible improvement in the near term'. -- AFP

[kennynah]

i have always wondered....what in the world does HK export? as far i am aware, the bulk of their sewing machine productions are shenzhen based...and that cannot be considered as HK exports, right?