Morgan Stanley released a research report stating that Hong Kong's August retail sales increased 3.8% year-on-year to HK$30.3 billion, marking the fourth consecutive month of growth and exceeding market expectations of 2% growth as well as the firm's own forecast of 1% growth.

The report noted that retail sales decline for the first eight months of the year continued to narrow to 1.9% year-on-year, an improvement from the 2.6% decline recorded in the first seven months. The firm believes that full-year retail sales are expected to return to flat levels.

The improvement in retail sales was primarily driven by increased visitor arrivals, with mainland Chinese and long-haul visitors rising 15% and 23% year-on-year respectively, along with various large-scale events held during the month.

Morgan Stanley indicated that luxury goods sales performed strongly, attributed to increased tourist spending and low base effects, though sales of necessities remained weak. The firm believes that WHARF REIC (01997) and HYSAN DEV (00014) share prices may benefit from these developments, although downward rental pressure and increased shopping at mainland duty-free stores remain concerns.

As for NEW WORLD DEV (00017), it is expected to capture greater market share in the Tsim Sha Tsui area.