Hong Kong’s Paul Chan banks on better market sentiment as retail sector stabilises Hong Kong’s finance chief has anticipated improving market sentiment after downward trends in the retail, catering and property sectors showed signs of stabilising, with the prospect of an interest rate cut cycle emerging. Financial Secretary Paul Chan Mo-po said on Sunday that authorities had been paying attention to the slow recovery of the retail and catering industries, even as the stock market remained robust, noting that their declining sales figures had stabilised over the past three to four months. The minister added that property prices had also stabilised, prompting more applications for land premium payments and construction projects recently. He noted that the recent positive sales of new homes had absorbed part of the stock of unsold completed flats. “Besides, the rate cut has begun. When people see a clearer prospect of the rate cut cycle and feel confident, the lived-in home market will be revitalised. The market sentiment will improve,” Chan told a radio show. “Under such circumstances, when people feel more confident, they are more willing to spend.” The Hong Kong Monetary Authority (HKMA) reduced the base rate by a quarter point to 4.5 per cent on Thursday, matching the US Federal Reserve’s cut hours earlier to its target rate. Chan on Sunday also said market sentiment had improved as the number of visitors to Hong Kong had recently increased, adding that the city was set to host many mega-events in the coming months. The city’s provisional retail sales for July were 1.8 per cent higher than the same month last year, which was also higher than the revised 0.7 per cent year-on-year rise recorded in June. The catering sector provisionally recorded a 0.8 per cent year-on-year increase in the value of total receipts in the second quarter of this year. On the housing front, lived-in home prices also rose for a fourth consecutive month in July, reaching a seven-month high. Chan earlier said on Thursday that he would maintain his forecast that the local economy would grow by between 2 and 3 per cent this year, citing a volatile external environment despite the base interest rate cut by the HKMA. Speaking on Sunday, Chan also highlighted measures in the government’s latest annual policy address that sought to help small and medium-sized enterprises as the city grappled with an unemployment rate of 3.7 per cent. “We hope such measures can stabilise employment and the market so everyone feels more composed in the current environment, even with challenges, and advance for a better outlook,” he said. The measures included authorities earmarking an extra HK$30 billion (US$3.9 billion) for capital works over the next two to three years, on top of an existing HK$120 billion annual budget for such projects. Chan said the additional sum would be used for small-scale and district-level public works to provide construction jobs as soon as possible, in the hope that the benefits could also spill over to other sectors. The finance chief also discussed the city’s land supply, saying the level would be sufficient over the coming decade – despite the shelving of a proposal to build three artificial islands in the waters off Lantau Island. “We need some land reserve, but not an excessive amount. Holding a large land bank ties up a lot of capital. If we build a massive land reserve and tie up [so] much capital, it is not viable,” Chan said. “We will roll out land parcels in a controlled rhythm with the market to ensure a stable supply. Meanwhile, it prevents people from worrying about a sudden oversupply that can negatively impact the market. We are very cautious about this.” The Development Bureau told the legislature earlier this month that it had shelved the 1,000-hectare (2,470-acre) reclamation project as the administration had yet to formulate an implementation timetable and did not have the “necessary conditions” to start. The bureau said on Friday that the government would provide about 2,600 hectares of developable land over the next decade, with peak availability expected between 2030 and 2032. https://www.scmp.com/news/hong-kong/hong-kong-economy/article/3326289/hong-kongs-paul-chan-banks-better-market-sentiments-retail-sector-stabilises (ICE HONG KONG)

Fonte notizia: South China Morning Post