Hong Kong retail sales data for March better than expected: Dao Heng Bank

HONG KONG (AFX-ASIA) - Retail sales data for March were better than expected, supported by the interest rate cut cycle in the U.S. and Hong Kong, said Daniel Chan, an analyst with Dao Heng Bank.	    In March, the value of retail sales was up 2.0 pct year-on-year. In volume terms, it grew 3.0 pct year-on-year, the government said.	    Chan said his forecast for retail sales in March was a 3.80 pct decline in value terms, and negative growth of 2.30 pct in volume terms.	    "After a series of interest rate cuts, the disposable income of customers was higher ... and they are more willing to spend on necessities, like food and clothing," he said.	    According to the Census and Statistics Department, the retail sales volume for food, alcoholic drinks and tobacco was up 6.0 pct in March, and there was 1.0 pct growth for footwear, allied products and other clothing accessories.	    "However, we should not be too optimistic, because the retail sales for luxury items remained quite weak ... That means the consumption pattern is still cautious," Chan said.	    In March, sales for motor vehicles and sales of jewellery, watches, and valuable gifts both declined by 5.0 pct in volume.	    Chan said customers will remain cautious in the medium term, because of the lower job security, adding that the retail sales sector will not experience a genuine recovery, until the second half of this year.

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