Hong Kong's shipment value sluggish at 0.3% growth

Very disappointing compared to 4Q12's 7% rise.

According to Hang Seng Bank's Hong Kong Economic Monitor, as expected, Hong Kong’s exports slid back into negative territory in February owing to the different timing of Chinese New Year holidays. Total value of exports declined for the first time since October last year, contracting by a whopping 16.9% in February after lifting 17.6% in January.

Though seasonal influences were clearly at play, the firm fears that the sharp fall in exports extends beyond one-off factors. For the first two months of the year, the city’s shipment value advanced only by 0.3%, a marked slowdown from a 7% growth over the 4Q12.

It was indeed curious that despite the Mainland’s exports growth of 23.6% in January-February combined, the city saw a meager expansion in trade flows during the same
period.

Here's more from Hang Seng:

We believe this pronounced disparity is associated both with different statistical methods, rising financial inflows to the Mainland as well as firm-based factors including tax rebate related ones. If we leave the Chinese data aside, data from Taiwan and South Korea are consistent with a slower pace of growth in the first quarter.

The softer-than-expected outturn is a reminder of the still-weak external environment, in spite of solid export growth trend in Mainland China. In the near term, domestic trade sector could still face challenges posted by the US payroll tax hike as well as increased uncertainties surrounding the European sovereign debt crisis.

Yet recent economic figures in US seem to suggest the world’s largest economy is doing better than what many had expected.