[GLOBAL ECONOMIC TIMES] Luxury goods stocks have recently shown a rebound. While expectations for improved consumption capacity due to the global ‘pivot’ (monetary policy shift) are being cited as the cause, attention is being paid to related investment products in Korea as well.
According to Investing.com on the 28th, the rate of return for Louis Vuitton Moët Hennessy (LVMH), a representative luxury goods stock, has fallen over the past six months, but has turned around, rising for five trading days. Hermes showed the same stock price trend, and Kering failed to reverse the upward trend, but reduced the decline by nearly 30%.
It is interpreted that the global trend of interest rate cuts has created a favorable environment for luxury goods stocks. Generally, when interest rates are lowered, household interest costs decrease, disposable income increases, and spending power increases.
In particular, it is encouraging that Europe, where luxury goods stocks are mainly listed, is steadily lowering interest rates. The European Central Bank (ECB) cut interest rates three times in June, then again in July, and on the 17th of this month. Another positive factor is that China, a major consumer of luxury goods, has recently lowered the Loan Preferential Rate (LPR), which is the de facto base interest rate, and implemented fiscal stimulus measures to revive the economy.
However, the third quarter performance of luxury goods stocks was not that good. LVMH's third quarter sales were slightly below consensus, and Kering's sales decreased by 15% compared to the same period last year. Hermes, in contrast, recorded good performance. Hermes' third quarter sales increased by about 11% compared to the same period last year, and recorded a growth rate of 7% in Asia excluding Japan.
As luxury goods stocks show signs of a rebound, interest is growing domestically as well. However, since most luxury stocks are listed on European stock exchanges and can only be traded through specific securities firms, investment through exchange-traded funds (ETFs) tends to be preferred.
Samsung Asset Management's 'KODEX European Luxury TOP10 STOXX' ETF, which invests intensively in 10 European luxury goods companies, and NH Amundi Asset Management's 'HANARO Global Luxury S&P (Synthetic)' ETF, which invests not only in luxury goods but also in overall luxury products such as luxury cars. is a representative product. According to the Korea Exchange, the two products rose 8.56% and 7.71%, respectively, over the past month.
You can also place your hopes on department store owners. According to the Ministry of Trade, Industry and Energy, last year, luxury goods sales accounted for 35.2% in department stores. Department store owners can also expect improvement in consumption capacity and momentum from the appreciation of the yen. If the yen strengthens, the demand for shopping for luxury goods in Japan may return to Korea due to the low yen merit.
Park Sang-jun, a researcher at Kiwoom Securities, said, “In the mid-term, there is a need to check the possibility of a rebound in the department store industry,” adding, “While the possibility of improved demand for durable goods is increasing due to a rebound in the real estate market centered on Seoul, the impact of sluggish sales of luxury goods due to the low yen is easing.” “This is because there is a possibility that the growth rate of existing stores will recover,” he explained.
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