Jan. 7 -- Parkson Retail Group Ltd., the Beijing-based department store chain, fell the most in a year on the Hong Kong stock exchange as China sales growth slowed.
The stock fell HK$1.25, or 14 percent, to HK$7.73 at the midday break in Hong Kong, set for the largest drop since Jan. 21, 2008. In Malaysia, Parkson Holdings Bhd., the Kuala Lumpur-listed holding company, lost 9.4 percent, the most since October.
The group yesterday said fourth-quarter growth in Chinese stores open at least 12 months cooled to between 7 percent and 8 percent, compared with a 12 percent rise for the year. Parkson cited the slowing trading environment in China, where it runs 40 stores. Recessions around the globe are cutting demand for Chinese products, prompting job cuts and factory closures.
“The result is a lot worse than expected,” Keith Li, a retail analyst at CIMB-GK Securities (HK) Ltd., said by phone from Hong Kong. “We will see growth momentum slow down for more retailers in China.”
Parkson, controlled by Malaysia’s Lion Group, blamed a “deterioration of the trading environment” in China’s export- driven coastal region. The company said in November that it planned “aggressive” promotions to encourage consumer spending along the coast.
Parkson Retail’s Hong Kong-listed stock was the biggest decliner on the MSCI Asia Pacific Index today. More than 21.1 million Parkson Retail shares changed hands in Hong Kong, almost triple the average daily total in the past six months.
DBS Group Research cut its rating on Parkson Holdings to “fully valued” from “buy.” Still, DBS said in a report that the company’s medium- to long-term prospects are “favorable” as consumer spending in China, Vietnam and Malaysia will grow.
Parkson Holdings dropped 40 sen to 3.88 ringgit in Kuala Lumpur trading at the 12:30 p.m. break.
(Bloomberg)
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