Weekly News Wrap: Hong Kong rolls out support for small retailers; Reliance Industries takes over 200 stores from Future Group
And China’s Shein has put on hold its US IPO amidst the crisis in Ukraine.
From Reuters:
Hong Kong will offer tax breaks, handouts and subsidies to small businesses and residents, to mitigate the impact of the most stringent social restrictions imposed in the city to curb the spread of COVID-19, Finance Secretary Paul Chan said.
The 2022/23 budget proposals were announced as hundreds of bars, restaurants and small retailers warned they were months away from closure, and shopping malls were deserted while the city endured its worst COVID-19 outbreak so far.
"Hong Kong is currently experiencing its hardest time in the fight against the epidemic, and we are facing enormous challenges," Chan told legislators online.
Total spending in 2022/23 was estimated at $103.47b (HK$807.3b) and revenues were estimated at $13.95b (HK$715.9b), returning Hong Kong's budget to a deficit. Hong Kong usually runs balanced budgets or surpluses, since its pegged currency system commits it to fiscal prudence, but still has ample reserves.
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From Bloomberg:
Reliance Industries is taking over 200 stores from struggling Future Group and transferring 30,000 workers from the Future Retail and Future Lifestyle operations.
Future Group’s financial problems have led landlords to terminate leases, with a number of them contacting Reliance to negotiate new agreements for the 200 outlets, Business Standard reported, citing an unidentified person with direct knowledge of the matter. As Future Group reduces its store count, Reliance will rebrand those outlets as its own.
The report comes just a day after Future Retail said it was scaling down its operations to reduce losses as it expands online and through home delivery. The retailer, with brands including Big Bazaar and fbb, has defaulted on servicing its loans and its lenders have categorised its accounts as non-performing assets.
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From Reuters:
Chinese fashion retailer Shein's plan to list in the United States has been put on hold due to volatile capital markets amid Russia's attack on Ukraine, said two people with direct knowledge of the matter.
Reuters reported last month that Shein had revived plans to list in New York this year and its founder was considering a citizenship change to bypass proposed tougher rules for offshore initial public offerings (IPOs) in China.
The stock market debut plan has now been put on hold for the second time as a result of the sharp market volatility over the past month that has been exacerbated in recent days by the invasion of Ukraine, those people said.
Investors rediscovered their risk appetite overnight after some initial sharp losses earlier on Thursday, as they weighed the longer-term impact of tough Western sanctions against Russia after it unleashed troops, tanks and missiles on Ukraine. But some analysts worry any rallies might be fleeting.
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