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| HKECIC Weekly Market News |
| 4 March 2019 |
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| Market Snapshots |
| Asia and Australasia |
Hong Kong: Exports fall 0.4% yr/yr in January
The Census and Statistics Department reported that the value of Hong Kong's total exports of goods decreased by 0.4% yr/yr in January, after falling 5.8% in December 2018. Year-on-year decreases were registered in the values of total exports to some major destinations, in particular India (-35.2%), Taiwan (-18.6%), Vietnam (-7.9%) and Mainland China (-3.9%). On the other hand, increases were recorded in the values of total exports to Malaysia (+25.6%), the Philippines (+24.4%), Singapore (+17.9%) and Thailand (+14.5%). Looking ahead, a Government spokesman said that moderating economic growth in many of Hong Kong’s key trading partners will likely weigh on Hong Kong's merchandise exports in the near term. Separately, the Hong Kong economy grew by 3.0% in 2018, marking the second year of above-trend growth but decelerated visibly in the second half of the year. According to the Office of the Government Economist, the Hong Kong economy is forecast to grow by 2-3% in 2019, on the assumption that the US-China trade tensions would not escalate from the tariff measures announced so far or might even ease somewhat.
Japan: Retail sales post weakest growth since May 2018
According to the Ministry of Economy, Trade and Industry, Japanese retail sales increased 0.6% yr/yr in January, down from 1.3% in December 2018. Retail sales growth has slowed for three consecutive months and was the slowest gain since May 2018. Sales rose at a softer pace for machinery & equipment (+1.6%), fuel (+2.0%) and medicine & toiletry stores (+2.6%), while sales fell for fabrics apparel & accessories (-0.3%), food & beverages (-0.4%) as well as general merchandise (-5.1%), among other things. On a seasonally-adjusted basis, retail sales fell 2.3% mth/mth in January, reversing a 0.9% gain in December. A separate report from the Ministry showed that Japan’s industrial production in January fell 3.7% from the previous month, a third straight monthly decline, prompting concern among investors that a slowing export demand will take a heavy toll on the economy. |
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| Europe |
Eurozone: Economic sentiment dips to a two-year low in February
Economic sentiment in the Eurozone has declined for an eighth straight month, marking a fresh two-year low as manufacturers became more downbeat in an environment plagued with trade uncertainties. In February as compared to last month, the Eurozone’s Economic Sentiment Indicator (ESI) registered a marginal decrease of 0.2 points to 106.1, according to data from the European Commission. The lower ESI was resulted from decreases in two of five sectoral confidence indicators, including construction (-2.0) and industry (-1.0), while confidence in services (+1.1), consumer (+0.5) and retail trade (+0.5) improved. Amongst the largest Eurozone economies, the ESI improved only in the Netherlands (+3.0), while it eased in France (-0.9) and Italy (-1.6). Sentiment in Germany (-0.1) and Spain (+0.0) remained practically flat. |
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| North America |
US: Economic growth slows in Q4
The US economy grew at an annualized rate of 2.6% in Q4 2018, slowing from 3.4% and 4.2% in the previous two quarters, according to the initial estimate from the Department of Commerce. The deceleration in real GDP growth in Q4 reflected decelerations in private inventory investment, personal consumption expenditures and federal government spending, among other things. Consumer spending, which accounts for two-thirds of US economic activity, grew at an annual rate of 2.8% in Q4, slower than the pace of 3.5% in Q3, suggesting the stimulus effects of the US$1.5 trillion tax cut might have begun to unwind. For 2018 full year as a whole, the economy expanded 2.9%, matching 2015 as the biggest increase since 2009. |
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J.C. Penney Company, Inc. (NYSE:JCP), a US-based department store chain, has announced its financial results for Q4 and full year ended 2 Feb 2019. For Q4, total net sales decreased 9.5% yr/yr to US$3.67 billion and comparable sales decreased 4.0%. For the full year, total net sales decreased 7.1% yr/yr to US$11.66 billion and comparable sales decreased 3.1%. Net income for the quarter was US$75 million, and net loss for the full year was US$255 million. The company plans to close 15 additional full-line stores and nine home-and-furniture locations as the retailer struggles to get its footing amid significant challenges for department stores. |
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Hong Kong Export Credit Insurance Corporation
2/F, Tower 1, South Seas Centre, 75 Mody Road, Tsim Sha Tsui East, Kowloon, Hong Kong |
| Phone：(852) 2732 9988 Website : www.hkecic.com E-mail : info@hkecic.com |
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