JP Morgan expects Hong Kong's retail growth in November to drop to low single digits and maintains a "neutral" stance on LINK REIT

JP Morgan released a report indicating that Hong Kong's retail sales in October grew by 6.9% year-on-year, accelerating from the growth rate in September and reaching a 22-month high. Non-essential consumer goods performed significantly better than essential goods.

Looking ahead to November, the bank expects retail sales growth to slightly slow to low to mid-single digits, mainly due to the potential decline in the unusually strong growth of electronic products; however, the year-on-year growth of visitors to Hong Kong and the low base effect will provide offsets.

Morgan Stanley maintains a constructive view on WHARF REIC (01997.HK) as non-essential retail has shown clear signs of bottoming out, while holding a neutral stance on LINK REIT (00823.HK) due to tenant sales falling short of expectations, primarily affected by the rising penetration of cross-border e-commerce platforms like Pinduoduo (PDD.US)