Swiss watch exports regain momentum as Chinese demand grows

[ZURICH] Swiss watch exports gained for a third time in four months as Chinese demand strengthened and the UK attracted buyers with its weak currency.

Shipments climbed 5.3 per cent to 1.7 billion swiss francs (S$2.436 billion) in June, the Federation of the Swiss Watch Industry said in a statement Thursday that underpinned signs of a rebound from the longest slump on record. Exports to China increased 12 per cent. Hong Kong, the industry's biggest market, rose 4.6 per cent for the second consecutive month of gains.

"The situation remains fragile locally," the federation said in a statement. "The US did not participate in the recovery and some European or Asian markets are still undergoing significant readjustments. The forecast for 2017 therefore remains one of prudent optimism."

Exports to the US slipped 1.3 per cent in June, bringing first-half shipments down 5.9 per cent; federation says situation in that market hasn't improved in more than 12 months, with no signs of improvement in the near future.

Shipments to the UK jumped 36 per cent, the biggest gain in more than two years, as sales are boosted by the weak pound.

All price points increased in value, except category below 200 francs.

"High-end watches have outperformed in the first half, boding well for Swatch and Richemont," MainFirst Bank's John Guy said.

Excluding calendar effects, exports were up 10 per cent in June, Citigroup Global Markets analyst Thomas Chauvet estimates, adding that the federation's data are distorted because they don't subtract inventory bought back by Richemont.

BLOOMBERG