Emperor Slides Amid China Anti-Corruption Push
Emperor Watch & Jewellery Ltd. fell the most in almost a year in Hong Kong trading, leading a drop in luxury stocks amid concerns that the industry could be hurt by Beijing’s anti-corruption drive.
Emperor, which sells high-end watches, fell 7.1 percent to 91 Hong Kong cents, the biggest decline since March 2012. Hengdeli Holdings Ltd., the retail partner of Swatch Group AG in China, lost 3.4 percent.
China’s media regulator on Feb. 5 ordered radio and television channels to cut advertisements suggesting “gift giving,” the country’s Xinhua news service reported. Some ads have encouraged people to give gifts including luxury watches and gold coins, the State Administration of Radio, Film and Television said in a circular, according to Xinhua.
“Investors are concerned that Beijing might clamp down on gift-giving,” Alex Wong, a director at Ample Asset Management said by phone in Hong Kong. The media regulator’s announcement added to those worries, he said.
China’s Lunar New Year holiday, which begins Feb. 10, is a peak time for gift giving.
High-profile corruption cases among business and government leaders, including the March ouster of Chongqing party chief Bo Xilai in an alleged graft and murder scandal, have put a spotlight on influence and gifting in public life.
The regulator’s push comes amid a campaign against corruption following a party conclave in November that saw Xi Jinping succeed Hu Jintao as Communist Party General Secretary. In November, both Hu and Xi warned that corruption threatened the party’s hold on power.
Jeweler Chow Sang Sang Holdings International Ltd fell 7.2 percent and Luk Fook Holdings International Ltd. lost 5.6 percent.
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