Chart of the Day: Silver lining finally shows for retail sector

The 7.1% 2012 volume will soon uptick.

According to DBS, Hong Kong retail sales is on a positive note, as it is strongly correlated with private consumption, a crucial driver of Hong Kong’s economic growth.

Here's more from DBS:

In 2012, retail sales values and volumes grew a meager 9.9% and 7.1% (YTD, Oct) respectively versus 24.8% and 18.4% in 2011. In 3Q12, China’s slowdown dampened tourists’ retail spending growth (using a proxy derived from popular tourist items) to just 2.2% versus 42.2% for the full year of 2011.

Subsequent recovery in the Chinese economy will likely bring about improvement in visitor spending, particularly from a low base. Locals’ spending should also improve on the back of a tight labor market as well as better consumer sentiment overall.

Further, the chart on the right shows that retail sales growth tracked well with the Hang Seng Index, which has already headed up. It won’t take long before retail sales recover as well.