(Bloomberg) -- China equity traders tormented by months of market turbulence are looking for fresh catalysts as the country heads into one of its peak seasons for consumer spending.
The nation's stock benchmark CSI 300 is poised for its worst quarter since March last year, as Beijing's crackdown on private enterprise, China Evergrande Group's debt crisis and a nationwide power crunch took a toll on stocks. Sluggish consumption has been another major concern, with health care and consumer staples leading the 7.5% plunge in the benchmark.
The upcoming National Day holiday, also known as the “Golden Week,” will provide a chance to gauge how far consumption is from bottoming out, after stringent virus controls dampened household spending.
Here are sectors linked to holiday activities that investors are watching:
Travel
Ticket booking figures suggest domestic travel may rebound during the seven-day break, the state-run Shanghai Securities News reported. The Ministry of Culture and Tourism's data on the number of visitors and revenues will be a way to keep a finger on the pulse, while online travel booking platforms such as Alibaba Group Holding Ltd.'s Feizhu and Tongcheng-Elong Holdings will also report their reservation data.
High-end hotels, restaurants and rural tourist attractions are seen benefiting the most as short-haul trips remain the most popular among consumers, according to the Shanghai Securities News report. Airlines, however, still face a bleak earnings outlook partly because health authorities have advised against cross-border travels. Chinese carriers are among the worst performers in the Bloomberg Asia Pacific Airlines Index this month.
Retail Spending
Consumer shares have been in the doldrums since the Lunar New Year in February, as residents' spending failed to match the sector's high valuations. The CSI 300 consumer staples and discretionary sub-gauges remain about 30% down from February peaks despite a rare surge in distillers like Kweichow Moutai Co. this week and a bounce in appliance stocks as property worries eased a tad.
Retail and catering revenues during the National Day holiday will likely be released by the government when the break ends. E-commerce giants including Suning.com Co., Alibaba, JD.com Inc. and Meituan may also disclose sales during the period.
Kevin Yin, head of greater China consumer research at JPMorgan Chase & Co. cautioned the spending on catering, entertainment and big ticket size items might be “behind market expectation,” citing concerns on strict city lockdown measures and recent power shortages.
Even solid figures could offer little relief because “GDP, Covid and inflation going into the heating season are more important,” said Hao Hong, chief strategist at Bocom International.
Entertainment
Box office ticketing will also be a key measure, after movie-going demand was disrupted by the delta variant in summer. Ticketing platform Maoyan Entertainment and data providers including Endata may release real-time sales statistics.
The holiday box office is expected to post double-digit growth from 2019 to reach nearly 5 billion yuan ($773 million), and shares of China Film Co., Beijing Enlight Media Co., Wanda Film Holding Co., and Huayi Brothers Media Corp. may benefit as movies they produce are scheduled for the holiday period, the China Securities Journal reported.
The holiday may offer some respite for Macau's gaming stocks, which are in desperate need of good news following a nearly $20 billion rout triggered by concerns over Beijing's tightening scrutiny.
Macau will strive to resume quarantine-free travel to Zhuhai by Oct. 1, the start of the holiday, if the Covid-19 situation in Macau is stable, Chief Executive Ho Iat Seng said at a briefing Wednesday.
A Bloomberg gauge of the gaming shares plummeted to the lowest in over a decade earlier this week.
©2021 Bloomberg L.P.
With assistance from Bloomberg
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