• Mon
  • Dec 22, 2014
  • Updated: 11:15pm
NewsHong Kong
TOURISM

Property, retail shares fall on fears chief executive will cut mainland visitor numbers

Chief executive plays down talk of 20pc cut in mainland visitors but property and retail investors don't get message and shop owners cry foul

PUBLISHED : Tuesday, 27 May, 2014, 11:16pm
UPDATED : Wednesday, 28 May, 2014, 7:26am
 

Chief Executive Leung Chun-ying yesterday played down reports the government was considering cutting the number of mainland visitors by 20 per cent.

But that didn't stop the shares of retailers and property developers falling and retailers crying foul.

Leung said the government was "listening to views" about how to handle the annual influx of 40 million mainland visitors, a number that is expected to reach 100 million by 2020.

Some legislators have called for the one-year visas that allow multiple entries, introduced in 2009, to be scrapped.

Pan-democrat lawmaker Claudio Mo Man-ching said yesterday that would effectively reduce the number of mainland visitors by 25 per cent.

"In Causeway Bay, buying a gold necklace is easier than buying a mop," she said. "Multi-entry permits should be halted and the number of individual visitors curbed."

Secretary for Commerce and Economic Development Greg So Kam-leung said the government would gather data on mainland visitors before discussing arrangements with Beijing.

The sight of mainland tourists pouring into the city, inundating public transport and snapping up homes, designer handbags and daily necessities has caused much public discontent.

Protesters have been on the march, demanding the government curb visitors from the mainland under the independent traveller scheme, who accounted for two out of every three visitors to the city last year. Mainland visitors accounted for 7.9 per cent of Hong Kong's inbound visitors in 2003, but this surged to 67.4 per cent last year.

The Hong Kong Retail Management Association warned that reducing those numbers would threaten the job security of the city's 267,000-strong sales workforce and urged the government to create more shopping malls and tourism facilities to ease pressure on existing shopping districts.

Shares in cosmetics retailer Sa Sa closed down 3.79 per cent at HK$5.58, those in jewellery chain Chow Tai Fook fell 3.22 per cent to HK$10.22 and those of fashion group IT lost 2.42 per cent to close at HK$2.42.

Prince Jewellery & Watch chief executive Jimmy Tang said he strongly disagreed with any move to cut visitor numbers.

About 90 per cent of the group's customers are mainland visitors and he expected to see sales suffer if the 20 per cent reduction went ahead.

Wholesale and retail constituency lawmaker Vincent Fang Kang said cutting the mainland visitor numbers by 20 per cent would be "too drastic".

He said the government should stop those mainlanders taking day trips as they were largely parallel-goods traders.

Helen Mak, of Colliers International, said retailers in Mong Kok and northern districts would be hit hardest by any restrictions, as they made profits from large volumes. "A drop in the number of buyers would definitely hit their sales, and consequently rents," she said.

Shares of Hysan, owner of Hysan Place in Causeway Bay, dropped 3.26 per cent to HK$35.60; those of New World Development, the landlord of K11 in Tsim Sha Tsui, dipped 0.22 per cent to HK$8.73. Shares in Wharf, which owns Times Square in Causeway Bay and Harbour City in Tsim Sha Tsui, were down 3.54 per cent at HK$53.10.

A Hysan spokesman said the group had a balanced portfolio of tenants and did not rely on any one group in particular.

Mak recently predicted overall rents in major shopping districts would fall 5 per cent in the next 12 months on the back of more vacancies, with Causeway Bay rents dropping 10 per cent.

Additional reporting by Ernest Kao

 

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26

This article is now closed to comments

oxymoron14.
I say Bring It On Armageddon! Let those eyesore shops fall and fall hard ! The retail sector in need of a total recall and I welcome a market crash to bring back the mom and pop stores that sell necessity items instead of precious metals or pharmacies that hardly sell medicines.
For once the Chief Executive is behaving like a competent leader that knows the pain and suffering of people living in a besieged city. If he wants his popularity ratings to rise now it's his window of opportunity. Walk the walk!
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I always though those clowns parading against mainanders in hotspot districts are idiots, but wow they are my heroes if that's what it takes to change the world.
-
Here is one for star trek fans: Vulcans - “Logic clearly dictates that the needs of the many outweigh the needs of the few."
Dao-Phooy
Rents dropping - that's a good sign. This manipulation of stock prices by the cartels is pathetic! Just look at the names of the companies listed in the article - all catering for the tourists. Maybe if rents go down ordinary people can start shopping again! No crocodile tears for any of those fat cats!!!
ennoun
Hong Kong managed just fine before the flood gates were opened shortly after the takeover to allow Mainlanders to come in the millions, disrupting the daily life of so many residents. What a poorly thought out policy that was from Day One. Now the predictions are that 100 million will come annually in a few years. What a disaster that will be.....most Hongkongers think it's a major problem now....just wait until then, we have not seen anything yet!
John Adams
Well spoken Sir !
I am sure that over 99% of HK residents would agree with you
The only ones that would disagree with you are the property cartels, greedy landlords and vultures like "Prince Jewellery & Watch chief executive Jimmy Tang"
____
PS : Message to CY : if your minister for idiotic and suicidal policies : Greg So really thinks that HK can accommodate 100 MILLION tourists per year , and worse still if you yourself actually agree with him , you both urgently need to read Malcolm Gladwell's famous book " Tipping Point" before Armageddon really happens on your doorstep.
.
Those parading clowns were just the ugly tip of the iceberg.
It's what lies beneath the visible iceberg tip you need to really fear because that's what sank the Titanic, not the tip.
.
(And NO! I am certainly not anti-Mainlanders, just as I am not anti- any tourists.
But I am anti crazy policies which will very soon strike the root and fabric of HK society to the core)
John Adams
I totally agree !
No tears for the fat, greedy property and cartel cats
donniemcm
"A drop in the number of buyers would definitely hit their sales, and consequently rents," If she meant the rent will drop, then yes please.
virokick
Mainland numbers down = CY Leung Popularity Up= Re-election chances up.
Mainland numbers down= Rental , Property Prices Down = HK people happiness up.
Mainland numbers down= Prada, LV , Chow SS, Sassa down= Rental down= local bakery/ noodle shops happy.
Cut up to 50% mainland numbers = cut more numbers = HK people more happy.
eddywonlung247
Hit them hard reduce mainlanders by 90 percent.
ton1998
First stop the parallel traders in Lowu border, one permit per day to cross border for hk and mainland visitors, it will make already a big difference in the statistics and the trains more quiet of people with big trolley's with merchandise.
HK-Explorer
The government does not need to lower numbers. 40 million is about right for Hong Kong. They need to move towards quality mainland tourists. They need to stop daily multi-entries tourists using HK for parallel trade. They need to build schools for HK born children. HK needs to better plan where mainlanders will shop.
We don't want to turn mainlanders off coming to ahK. Over the next 6 years several new MTR lines and a major high speed rail line will go into production. To keep those costs down requires substantial ridership.
HK should look into a small sails tax to bring the advantages of tourists to all HK residents.
It is all about planning not these big grand stands CY does which just cause confusion.

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