Shares in Chow Tai Fok drop after request by Xi Jinping.
The incoming Chinese leadership impacted jewellery shares last week after requesting that jewellery and watch advertisements portraying gift-giving to bosses were banned following a similar move for TV and radio advertising earlier in 2013.
China is in the midst of a crackdown on anti-corruption in business with a focus on luxury jewellery and watch gifting, believed to be used to help facilitate and seal business partnerships and deals.
According to the Financial Times, shares in jewellery manfuacturers and chains Chow Tai Fook, Chow Sang Sang and Luk Fook lost up to 7% in the second half of last week following the statement from China’s incoming president Xi Jinping.
Along with the crack down on advertising, lower bonuses and job cuts among investment bankers risk impacting sales of luxury goods. In February this year China banned TV and radio advertising of luxury watches and jewellery as gifts, in particular those items marketed as gifts for businessmen, bosses or "leaders".
According to Bloomberg data jewellery sales in Hong Kong grew in November and December last year, up by 13.4% cent and 11% respectively against the same months in 2011. Figures released at this year’s BaselWorld with a view to exports outlined that the Chinese jewellery industry is a growing contender in global jewellery exports, last year selling jewellery with a value of US$30 billion (£19.6bn), closely tailing India, with exports – mainly to Europe and the US – totalling $15 billion (£9.8bn).