May 1 'Mini Golden Week' Prompts Scramble For Retail Stocks

The Venetian in Macau is the largest shopping mall, hotel, and casino in the world and sees a huge influx of Chinese travelers during Golden Weeks. (Shutterstock) As many Chinese shoppers prepare to scramble for discounts during the upcoming “mini Golden Week” starting May 1st, investors fight to purchase retailers' stocks prior to the holiday. There are several signs that speculation for retailers’ stocks will run rife, as retail sales are expected to soar during the short vacation period. While retailers and media often focus on the two seven-day “Golden Week” national holidays—the Chinese Lunar New Year Golden Week in January or February and the National Day Golden Week in October—China has a third “Golden Week” holiday period coming up. Beginning on May 1, this Labor Day celebration used to be as long as the other two, but was reduced to three days in 2008. Millions of Chinese people travel and go shopping during these holidays—7.7 million passengers traveled by air and 10.33 million passengers traveled by railway during last year’s October Golden Week, and national monuments experienced a burgeoning surge of visitors. While May’s Golden Week is only three days, it is still plenty of time for Chinese travelers to go shopping in the nearby areas of Hong Kong or Macau, or simply take advantage of the discounts available online. Xinhua reported that for the upcoming mini Golden Week, Chinese luxury e-tailer Luxnut was gearing up to “fight for customers” against competitors with deals and discounts. Hong Kong news outlet The Sun notes that this year, stock increases are more likely to come from mid-market goods than from luxury. While China's anti-corruption campaign is expected to have a detrimental effect on luxury, shares of non-luxury retailers selling items including "clothing, apparel, and necessities" will be propped up prior to the period. With the surge in sales and traffic, stock investors are clamoring for a slice of the gold that comes from Golden Weeks. China’s Ministry of Commerce announced that retail sales rose 14 percent to 870 billion yuan ($140 billion) during last year’s October Golden Week. At that same time, Bloomberg also reported that Beijing’s Wangfujing Department Store group stocks jumped 2.8 percent. With the May mini Golden Week coming up, some establishments’ stocks are already getting a boost. Hong Kong-listed casino companies saw their shares jump in early April, fueled by demand after government data showed a faster-than-expected pick-up in revenue, reported Macau Business Daily. Sands China jumped 9.6 percent and Galaxy Entertainment gained 7.9 percent; these two were the best performers on the Hang Seng Index that day. However, the race for stocks prior to Golden Weeks can be deleterious to companies, says The Sun. The mass buying of stocks before Golden Weeks, and then dumping them afterward creates a “rollercoaster effect” that could undermine investors’ confidence in the economy and companies.

May 1 'Mini Golden Week' Prompts Scramble For Retail Stocks

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Published April 23, 2014

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May 1 'Mini Golden Week' Prompts Scramble For Retail Stocks