The government's HK$6,000 cash handout is expected to be good news for shopkeepers, pushing up the value of retail sales by as much as 5 percentage points this year, according to one report.
'Consumers tend to spend a large proportion of these giveaways,' wrote CLSA Asia-Pacific Markets analysts Aaron Fischer and Mariana Kou, citing the experience in Australia in 2009 by way of example.
Assuming that Hongkongers spend one-third to half of the payout, their report said the giveaway could boost retail sales by 3 to 5 percentage points, on top of CLSA's original forecast of 18.4 per cent annual growth this year.
Financial Secretary John Tsang Chun-wah proposed on Wednesday to distribute HK$6,000 cash to each of the six million adult permanent residents, totalling HK$36 billion. CLSA said the total amount represents around 11 per cent of the city's annual retail sales, which was worth over HK$320 billion last year.
The Australian government handed out A$950 to each person to boost the economy in 2009, the brokerage said.
'The Australian handout represented around 5 per cent of annual retail sales, and we estimated that the retail sales were boosted by around 1.5 to 2.5 per cent, implying that between 30 and 50 per cent of the handout was spent,' the research said.
It added that retailers and landlords, including Hutchison Whampoa, Dairy Farm International Holdings, cosmetic company Sa Sa International and fashion brand I.T, would be the key beneficiaries of the handout.
