Source:
https://scmp.com/business/money/article/1780977/chart-day-asian-stock-rally-may-not-boost-retail-sector
Business/ Money

Chart of the day: Asian stock rally may not boost retail sector

Equity prices in emerging Asia have risen 14 per cent year to date, the strongest gain in six years. For economies with a large equity market, large domestic ownership and sophisticated financial institutions, the clear expectation is that a rise in stock markets will generate positive wealth effects that should boost private consumption. That is good news for Hong Kong and South Korea, but less so for mainland China, India, Indonesia and the Philippines, not least because real wage growth is suffering downward pressure. "The average real wage growth in the region fell from 3.3 per cent in 2013 to 2.0 per cent in 2014," economists at HSBC wrote in a note to clients. "Workers in Hong Kong and the Philippines reported a decrease in their purchasing power last year." In other words, don't expect the market rally to unleash a sudden spending splurge.