Cheap and cheerful theme for hard times
If you’re a typical or habitual trader, you’ll know it’s better to just sit around than waste time and money betting in this moribund market.
But you may also be itching for some action, not necessarily to make a lot of money, but just to show your peers your instinct remains as sharp as ever.
Wall Street legend has it that an investment guru once advised his disciples to get some inspiration by taking an occasional stroll down the streets or visiting shops.
If you had done that recently in Hong Kong, you would probably understand the exceptional performance of the stocks of some local restaurant chains that have bucked the market downtrend.
Latest government figures show that the receipts of fast-food restaurants, including the highly popular Cafe de Coral, Fairwood and Maxim’s, rose a healthy 6.7 percent in the first quarter of this year compared with a year ago, while total receipts of restaurants in Hong Kong overall fell 0.5 percent during the same period.
If you’re still unconvinced, have a meal at one of the local fast-food outlets in any residential area and you would likely be shocked by the long queues at the counter, not only during dinner time, but also throughout the day for breakfast, lunch and afternoon tea.
A decent meal along with a drink can be had for less than HK$50, while just a cup of coffee at a Lan Kwai Fong restaurant costs more.
The reason for the growing popularity of these eateries is obvious. In these tough times, most people have become more conscious about saving up for a rainy day, widely expected hit soon. The first thing to forego is the luxury of eating out at regular restaurants where a meal for four can easily make you poorer by more than HK$1,000.
As for stocks, choices in chain restaurant shares are limited. But the rationale behind picking stocks can be extended to other sectors. For instance, more people can be expected to restock their summer wardrobes by shopping at Giordano or G2000 rather than Polo or Burberry.
Due to the influence of Chinese mainland investors, Hong Kong stock traders have become accustomed to the notion of “theme” stocks.
Here, they don’t have government policies to guide them to the next theme.
But the market is telling them that the predominant “theme” now is the economy, which is going down.
Thrifty diners wary of tougher times ahead have helped fast food chains such as Cafe de Coral buck the downtrend in Hong Kong’s restaurant scene.