Weekly News Wrap: China’s wealth plans hit European luxury retailers; India’s proposed e-commerce rule faces dissent

And Singapore will provide pandemic support measures to its retail sector.

From Reuters

China's stuttering economic recovery and plans to redistribute wealth threaten to derail Europe's booming luxury sector, leaving many investors apprehensive about buying the stocks even after their sharp August sell-off.

Demand for high-end products in the world's most populous nation is the main driver for the sector, accounting for a third of European luxury goods makers' sales in 2019 and 28% in 2020, according to UBS analysts.

Around $120b was wiped off the sector including Louis Vuitton owner LVMH, Burberry, and Gucci owner Kering in just two days last month after Chinese President Xi Jinping unveiled plans for "common prosperity".

Several analysts used the slide to recommend investors bet that luxury stocks' heady resurgence from COVID-19, which saw the European sector rise 140% from March 2020 to its 12 August peak, would resume.

However, Chinese economic data and supply chain problems caused in part by new local coronavirus outbreaks have put brakes on the sector's rebound from August lows, triggering a second sell-off.

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From Reuters

India's plan to tighten rules on its fast-growing e-commerce market has run into internal government dissent, memos reviewed by Reuters show, with the Ministry of Finance describing some proposals as "excessive" and "without economic rationale".

The memos offer a rare glimpse of high-stakes policy-making governing a market already featuring global retail heavyweights from Amazon to Walmart, plus domestic players like Reliance Industries and Tata Group. The sector is forecast by Grant Thornton to be worth $188b by 2025.

It's not clear how the objections from the finance ministry - a dozen in total - will ultimately be reflected in the proposed rule changes, first floated in June. But watchers of the influential government arm say its complaints won't fall on deaf ears in the upper echelons of Prime Minister Narendra Modi's administration.

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From Bloomberg

Singapore will spend $480m (S$650m) to provide additional support measures and cushion the impact of its renewed virus-related restrictions on workers and businesses.

The latest package includes an enhanced jobs support plan for sectors which are significantly affected, including restaurants and food stalls, retail, and cinemas. The government will provide a two-week rental waiver for tenants on state-owned commercial properties, and an equivalent cash payout to those on private ones.

The package will be funded from higher-than-expected revenues and there won’t be a further draw from its past reserves, the government said Friday. Authorities will boost jobs support and waive rentals for some business owners, and give financial assistance to taxi and private hire car drivers as part of the plan, it said.

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