Hong Kong's listed watch and jewellery retailers weathered a bad patch last week. Chow Tai Fook fell 9.6 per cent on Wednesday after Apple Daily reported it was cutting a guaranteed bonus for back-office staff that was supposed to be equal to three months' salary.
Investors took the news as confirmation of a slowdown in Hong Kong's watch and jewellery sector, and on Wednesday also sold out of shares in Luk Fook, Oriental Watch and Chow Sang Sang, among other stocks in the sector. The firms are struggling with declining sales growth.
The share prices of Hong Kong's jewellery stocks are down for the year, some by a lot (see table).
This is a reversal. The mainland consumer market was the big investing theme last year. Hongkongers saw the evidence of this boom in the long queues of shoppers at the local boutiques.
Jewellery stocks were the top picks of the hot consumer market, and the watch and jewellery firms took advantage of favourable sentiment with a series of fund-raisings.
Chow Tai Fook Jewellery, one of Hong Kong's highest profile listings last year, raised HK$15.75 billion in its December initial public offering. This was followed by share sales for Luk Fook and Emperor Watch, and now Graff Diamonds has a US$1 billion Hong Kong IPO.