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| HKECIC Weekly Market News |
| 11 January 2021 |
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| Market Snapshots |
| Asia and Australasia |
Hong Kong: PMI dropped to lowest since April
The IHS Markit Hong Kong Purchasing Managers’ Index (PMI) plunged to 43.5 in December 2020 from 50.1 in the previous month. The decline was the steepest since April, signalling a further deterioration in business sentiment after a brief stabilisation. Output and new orders both fell at the sharpest rates since April as the Covid-19 restrictions dampened demand, curbed business activity and hit supply chains. Exports plummeted at a faster rate in December, blamed on slumping demand arising from lockdowns in key markets, as well as shipping delays. Chris Williamson, Chief Business Economist at IHS Markit, commented the hit to demand has been exacerbated by record supply chain delays and rising costs, as the pandemic has reduced international transport capacity and led to logistics bottlenecks. The PMI indice vary between 0 and 100, with a reading above 50 indicating an overall increase compared to the previous month, and below 50 an overall decrease. |
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| Europe |
Eurozone: Retail sales contracted more than expected in November
According to Eurostat, the statistical office of the European Union, the seasonally adjusted volume of retail trade in the Eurozone fell by 6.1% mth/mth in November 2020, reflecting tightening Covid-19 restrictions in most countries. The fall was much larger than the 3.4% forecast by economists. Among Member States for which data are available, the largest decreases in the total retail trade volume were observed in France (-18.0%) and Belgium (-15.9%) and Austria (-9.9%). The highest increases were registered in the Netherlands (+2.6%) and Germany (+1.9%). Separately, Eurozone inflation was negative (-0.3% in December 2020) for the fifth consecutive month, although business expectations improved markedly on the news of vaccine approvals. The fall in prices was driven by weaker growth in the cost of food than in the previous month and the contraction in energy prices.
UK: PM imposes harsh lockdown as new Covid-19 variant spreads
UK Prime Minister Boris Johnson reimposed a lockdown in England from 5 January as a more transmissible variant of Covid-19 fuels a surge in infections and hospitalizations in the country. During his televised address to the nation, Johnson reimposed measures seen during the first lockdown in March 2020, including closures of non-essential retail and schools. The lockdown is expected to remain in place at least through the middle of February. Following the lockdown announcement, the UK government has announced a new financial aid package worth almost GBP 4.6 billion for businesses most affected by the most recent lockdown, including one-off grants for retail, hospitality and leisure businesses. The government late last year extended its existing furlough scheme until end of April 2021. |
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| North America |
US: Trump bans Alipay and seven other Chinese apps
US President Donald Trump has signed an executive order banning transactions with eight Chinese apps, including Alipay, CamScanner, QQ Wallet, SHAREit, Tencent QQ, VMate, WeChat Pay, and WPS Office. It marks the latest escalation of the US-China tech war before Joe Biden will be sworn into office in two weeks and it is not clear whether he plans to implement Trump’s new order, which will take effect in 45 days. The latest ban comes as the White House pushed the New York Stock Exchange (NYSE) to delist three Chinese telecoms giants including China Mobile, China Telecom and China Unicom following a Trump administration executive order. Earlier, the US has also restricted a number of Chinese and Russian companies with alleged military ties from buying sensitive US goods and technology. |
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One of the UK's best known stationery chains Paperchase has filed a notice to appoint administrators. It comes as the majority of its employees remain on furlough in line with lockdown restrictions. A spokesperson of Paperchase said that the cumulative effects of two lockdowns and the current restrictions have put unbearable strain on retail businesses across the country. The company has 127 stores and about 1,500 employees. |
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Copyright © 2021 Hong Kong Export Credit Insurance Corporation |
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Disclaimer
The information contained in the ‘Weekly Market News’ (WMN) is compiled by the Hong Kong Export Credit Insurance Corporation ("HKECIC") for general information only. Whilst HKECIC endeavours to ensure the accuracy of this general information, no statement, representation, warranty or guarantee, express or implied, is given as to its accuracy or appropriateness for use in any particular circumstances.
HKECIC is not responsible for any loss or damage whatsoever arising out of or in connection with any information including data or programmes on the WMN. HKECIC reserves the right to omit, suspend or edit all information compiled by HKECIC on the WMN at any time in its absolute discretion without giving any reason or prior notice. Users are responsible for making their own assessment of all information contained in this WMN and are advised to verify such information and obtain independent advice before acting upon it.
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