Cheap and cheer­ful theme for hard times

China Daily (Canada) - - HONG KONG -

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.

PRO­VIDED TO CHINA DAILY

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.

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