The prestige products sector is on the rise on Monday, the main driver of the rise of the Paris Stock Exchange, while the American places are closed for Memorial Day. This day is a public holiday in tribute to soldiers who have fallen for the nation, in all wars. LVMH, Hermès, Kering and L’Oréal, which account for more than 20% of the capitalization of the Cac 40, thus occupy the best places in the ranking of the highest increases of the day. The spirits manufacturer Pernod Ricard is not far away. Excluding the flagship index, Interparfums climbed more than 5% and the cognac producer Rémy Cointreau more than 3%. In Zurich, Richemont, owner of the Cartier brand, grew by 4%. On the Copenhagen Stock Exchange, the costume jewelry manufacturer Pandora jumped more than 10%. In Frankfurt, Hugo Boss gains 3%.
And when luxury is doing well on the stock market, it’s because the good news very often comes from China, where the number of Covid-19 cases continues to fall, to three-month lows, particularly in Shanghai and Beijing, the main economic metropolises of the country. This encourages the authorities to relax the restrictive measures in force.
Beijing reopens shopping malls
In Beijing, the number of Covid-19 infections fell to 12 on Sunday, from 21 cases on Saturday. Curbs on the movement of people began to be reduced in several neighborhoods yesterday and shopping malls are reopening after officials said the outbreak was under control. No more concern, therefore, for the moment, concerning a more general confinement of the city, while the number of cases previously numbered in the dozens and the first were observed in October, leading the government to initiate a zero Covid policy. . In Shanghai, there were only 67 infections yesterday, compared to 122 on Saturday. Production should gradually resume in factories from Wednesday.
Because the main objective today is to revive an economy suffocated by confinement. The Chinese Prime Minister admitted yesterday that the economic difficulties of his country were, at present, ” even greater than in the pandemic shock of 2020 “. Li Keqiang admitted that “ since March and even more so since April, economic indicators on employment, industrial production, electricity consumption and freight transport have fallen markedly. Bloomberg consensus economists expect growth of 4.5% this year, a pace well below the 5.5% target set by Beijing.
To restore economy
Measures to support the economy are implemented, including the reduction of taxes for the purchase of cars, the extension of loan maturities for consumers and businesses and even more infrastructure projects. Over the weekend, Shanghai said the city will speed up approvals for real estate projects and will increase its residents’ car ownership quota by 40,000 this year. Purchase taxes for certain passenger vehicles will be reduced and subsidies granted for the acquisition of electric cars.
Asia and especially China are major outlets for luxury and spirits companies, for which it is generally the second largest market after the United States. It is even the principal for the high-end cognacs of Rémy Cointreau. Kering is also very exposed through its subsidiary Gucci. Interparfums, much more sensitive to the American market, nevertheless makes it one of its commercial development objectives.