As shoppers stay away, Hong Kong retailers’ share prices tumble. But that doesn’t make them a smart buy, analysts say

The outlook for Hong Kong retail – from sales of Mickey Mouse pure gold pendants to cosmetics and high end fashion – is pretty grim. Protests, headed into their 16th week with no end in sight, have hammered related stocks.

Just take a peek inside stores like Sa Sa, Chow Sang Sang or Sogo and you can see why analysts advise investors to avoid shares in the sector. Sometimes clerks outnumber shoppers.

Protests have led stores and even entire malls to shut down early. Mainland tourists – who normally drive luxury sales – aren’t visiting nearly as much. And even locals, fearful they may see a cut in their work hours or even their position, are thinking twice about buying luxury items.

“I don’t know how it will end finally, but before it ends, those stocks related to the domestic economy will get hurt,” said Kenny Wen, wealth management strategist at Everbright Sun Hung Kai.

“The latest figures for retail sales are free falling. No one will buy retailers now, even though they are cheap. We don’t see any specific factor driving the stock prices to go up significantly in the near future,” Wen said.

Amid ongoing protests, tear gas and pepper spray are routinely deployed by police. Protesters hurl petrol bombs. The city’s airport – one of the world’s busiest – cancelled flights on two consecutive days. Sundays – when the largest protests have been held – turn into traffic nightmares.