Macau Business Editorial | May 2022 | By José Carlos Matias – Director
The famous adage “sell in May and walk away” is informed by the typical underperformance of stocks in the six months from May to October. According to conventional wisdom, investors should cash in and divest in late spring, then reinvest in November.
That aside, in these atypical times rather shaped by the pandemic and geopolitical factors, markets remain intimidated by this. black beast of all investors: uncertainty. Yet despite the prevailing pessimism – admittedly a reflection of the real economy – financial markets have yet to take a nosedive like they did during the US-triggered global financial crisis. In recent months, the Hang Seng index has hit a six-year low, but it’s still a far cry from the slump of 13 years ago.
A key driver of the recovery after 2008/09 was China’s 4 trillion yuan economic stimulus package, which had a global impact. It was crucial for reviving global growth, while bringing with it hot money side effects. It was the compromise at the time. We now find ourselves in a fundamentally different moment marked by relentless pandemic woes compounded by the war in Ukraine, a reheating of existing global trade frictions, inflation and a cycle of rising interest rates.
For China, trying to meet the GDP growth target of 5.5% for this year is of paramount importance. The most recent COVID-19 shutdowns have impacted supply chains, and central authorities have launched a number of key measures aimed at finding a way forward in terms of demand and supply. The State Council and Politburo meetings held in April both highlighted the need to stimulate consumption.
Here in Macau, the government has launched a new series of consumer electronic cards worth MOP 8,000 per capita, injecting some MOP 5.88 billion into the local economy between June and December. As welcome as it is, this decision does not go far enough according to the company representatives featured in this issue of Macau Business, which offer additional measures such as employment and rent subsidies for SMEs struggling with overhead costs. Authorities would do well to emulate some of the pandemic best practices adopted elsewhere – overseas and right next door on the mainland and in Hong Kong, such as the latter’s job support scheme, which provides wage subsidies to employers to help them retain their staff (subject to suitable and fair criteria) during particularly difficult months.
Going back to the demand side of the equation, the consumer stimulus could go beyond handouts to residents. While these are important and have greatly helped consumers and businesses over the past two years, why not include non-resident workers in the package or roll out a new kind of consumer regime for tourists? This would inject additional money into the economy and, thanks to visitors, could stimulate the recovery of the city’s vital sector: tourism. Alongside private consumption, public procurement of goods and services could be stimulated to reach out to SMEs.
Surely there are other concrete and impactful measures that can be considered by the authorities for possible adoption as part of the public policies of the SAR Government to help the city navigate the uncertain waters of the coming months and external factors. probable adverse events in progress. The recently announced measures indicate that the authorities are, at least partially, receptive to societal concerns. The pilot program allowing the importation of domestic workers from the Philippines and the plan allowing foreign professionals in specific and underrepresented fields to enter the local workforce are steps in the right direction in response to the problems of human ressources. We will undoubtedly need more in this vein in the form of big steps forward, and on many fronts, lest we overlook the needs of the most vulnerable groups and the looming mental health challenges.
Faced with our real economy, the government could reverse the old saying and find a new rhyme for the times: “Invest in May to keep the crisis at bay”.
Be 18 years old
Macau Business turns 18 this month with a sense of pride, fulfillment, gratitude and duty.
What began in May 2004 as RAS’s first English-language news publication, launched and developed by our founder Paulo A. Azevedo, grew into the multimedia group Project Asia Corp., which has continued to aggregate value, since the launch of our sister Publication in Chinese, 商訊(Business Intelligence)and our lifestyle point of sale, Essential Macau, business dailythe MB.tvvideo platform and our 24/7 online news hub, Macau News Agency– not to mention a number of other creative activities and events.
None of this could have been achieved in these 18 years without the talented and hardworking members of our team, our loyal readers and the valued partners, suppliers and customers who have joined us on this journey. It is thanks to you and all of them that we continue to tell the fascinating story of Macau and to communicate relevant regional, national and international developments, always striving to respect the characteristics of publications: quality journalism, editorial independence and emphasis on transparency and social accountability. .
Despite the recent difficult times that we are all experiencing, we have been able to move forward, without flinching, by forging even stronger ties with our readers and partners. With that silver lining in mind and confidence in the future, we sail on and send you all our heartfelt thanks.