Hong Kong retail sales below expectations: Dao Heng Bank

HONG KONG (AFX-ASIA) - Hong Kong February retail sales were weaker than anticipated, reflecting Hong Kongers reluctance to spend at a time of low job security, according to Dao Heng Bank economist Daniel Chan.    February retail sales were down 2.0 pct year-on-year in volume terms and down 4.0 pct from a year ago in terms of value at 13.5 bln hkd.    Chan said: "We were looking for a rise in retail sales for February by 0.7 pct year-on-year in volume terms and a 1.2 pct decline in value terms," he said.    Although the weak economic situation in the U.S. should lead to further interest rate cuts there and consequently in Hong Kong, the effect of these reductions will not be noticeable until the second half, Chan said.    Also, unemployment may be on the rise and this will have a negative impact upon consumer confidence.    "The unemployment has not improved much recently ... and it may be getting worse again," Chan said.    Hong Kong's unemployment rate was at 4.5 pct for the three months to February, compared with 4.30 pct for November to January.    The reduced job security was reflected in a sharp fall in sales of certain luxury items.    In volume terms, sales of jewellery, watches and clocks, and valuable gifts were down 7.0 pct year-on-year.    Also negative for consumer confidence is the recent sharp drop in the stockmarket.     "Whenever the stockmarket crashes, consumers become unwilling to spend," Chan said.    For 2001 as a whole, Chan said he expects retail sales to be up 3.0-4.0 pct in volume terms from last year.		

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