Bulls are back as Yellen spurs EM stock surge
LONDON — Stocks in developing nations are flashing signs that the bulls are back after Janet L. Yellen indicated the era of cheap money won’t end anytime soon.
Australian shopping malls turn to village life as retailers feel pinch
SYDNEY — As Australia’s local merchants struggle with an influx of global names, leading malls are considering returning to their village center roots to woo new tenants by moving away from shops and offering medical facilities, more restaurants and even amusement parks.
Several top retailers have recently succumbed to pressure from foreign giants such as Japan’s Uniqlo and Sephora of France and with Amazon plotting its debut in the country, the future looks tough.
The response from developers has been to redefine the mall away from a “shopping” focus to become a more community-driven service and entertainment space.
While cafes and restaurants have long helped attract shoppers to malls, they are now filling shopping centers, providing some buzz even as an eerie quiet fills some nearby clothing stores.
With the big global names pouring huge sums of cash into the country, once popular clothing chains such as David Lawrence, Pumpkin Patch, Herringbone, and Rhodes & Beckett have bitten the dust, while others scramble to reduce costs.
This has included cutting back on bricks and mortar stores, and steering center owners towards food, entertainment, health care and childcare providers.
Major landlords such as Vicinity and Westfield spin-off Scentre, which this year have seen their share prices slip to one or two-year lows, are already redeveloping their arcades.
Vicinity’s Chadstone Shopping Centre in Melbourne, Australia’s largest mall, is now the site of the southern hemisphere’s first massive amusement park Legoland.
The company is also tapping into newer technologies such as facial recognition to identify consumers through their age and gender and analyze their shopping habits.
“What we are seeing is the malls starting to pivot away from commodity-type products… towards retailers that offer a service which isn’t physical,” real estate firm Cushman & Wakefield’s retail investments head Nick Potter told AFP.
“Shopping centers are the modern village, it’s where everyone comes together. These centers are typically located in the center of towns, they’ve got strong infrastructure… and that offers up the ability to move with the times.”
UTOPIAN VISION
The move is a return to the vision of Victor Gruent, an Austrian-born American who in the 1950s developed the concept of the arcade as a public space akin to the market place of centuries past, where civic life played a central role.
Adding to the shift is the growth of online shopping, which offers shoppers the same options but with the added bonus of not being subject to general sales tax (GST) for anything below Aus$1,000 (US$760).
Canberra has sought to end the loophole by imposing a 10% levy from next July but the lower margins for online store such as eBay and ASOS still makes them attractive.
While online shopping is estimated to make up a little more than 10% of total retail sales, future arrivals such as Amazon could change that.
“If (online shopping) jumps up in a big way, how does that affect bricks and mortar? Maybe all shopping centres just become cafes,” University of Technology Sydney accounting expert David Bond told AFP.
“You’ll probably see it move more towards just products being sold online, versus services, cafes, cinemas, game centers and creches (at malls).”
The University of Canberra’s Lisa Scharoun, who analyzes the cultural role of shopping centers in societies, has seen the changes first-hand, with more than half of a local mall now filled with restaurants and cafes.
Scharoun said developers were moving away from hosting consumption-driven stores and were more willing to lease space to other users such as churches and libraries.
“I think that the mall is evolving back to what it was actually intended to be when it was first conceived,” she told AFP. “It was supposed to be like an enclosed community space… a utopian vision of Victor Gruen.” — AFP
Peso may rebound after weak US reports
THE PESO may gain against the dollar this week after US inflation came out weaker than expected and hawkish bets on the European Central Bank’s (ECB) next move, as well as the recent comments of US Federal Reserve Janet L. Yellen on gradually hiking interest rates.
The local currency ended last week weaker, closing at P50.65 versus the greenback on Friday, 12 centavos lower from the previous session’s close of P50.53 per dollar. Week-on-week, the peso also slid from its P50.58-a-dollar close last July 7.
An analyst said the exchange rate could settle at P50.40 to P50.80 this week, with the peso expected to have an upward bias on the back of weak key US economic reports, as well as likely hawkish statements from the ECB at its meeting this week.
“The dollar might depreciate this week, driven by softer US reports on retail sales and inflation as well as likely hawkish statements from the European Central Bank,” Guian Angelo S. Dumalagan, market economist at the Land Bank of the Philippines, said in an e-mail.
ECB policy makers meet on Thursday. The central bank is keen to keep its asset purchases open-ended rather than setting a potentially distant date on which bond-buying will stop, to retain flexibility in case the outlook sours, Reuters reported.
Meanwhile, US consumer price index remained unchanged in June versus the 0.1% drop in May after the price of gasoline and mobile phone services continued to decline, the government reported on Friday.
The US Commerce Department also reported that retail sales dropped by 0.2% in June, anchored by a slump in receipts at service stations, clothing stores and supermarkets. Year-on-year, retail sales increased 28% by end-June.
Following these weak economic reports, prospects of a third monetary tightening by the Fed before the year ends have dimmed.
CME Group’s FedWatch program bared financial entities are now pricing in a 47% chance of another interest rate hike in December, 55% down from previous data.
“The dollar’s projected decline might be tempered by safe-haven buying amid possibly weaker Chinese data on retail sales, industrial production and overall economic growth,” Mr. Dumalagan said.
“The factors that could reverse the dollar’s projected downward bias include weaker-than-expected Chinese reports, more hawkish remarks from US policy makers, and unexpected dovish comments from the ECB,” he added.
Meanwhile, a trader said the exchange rate for this week will depend on US inflation data and the tone of the Fed.
“Important data on US inflation and the Fed’s remarks will dictate the movement of the peso this week,” the trader said by phone on Friday, noting the peso could move within a wide range of P50.40 to P50.80 against the dollar this week.
Another trader said the peso could remain in consolidation, with trading range likely to fall within P50.40 to P50.70 today. — J.M.D. Soliman