Bernard Arnault, the billionaire chairman of luxury powerhouse LVMH, saw his wealth surge by a remarkable $17 billion in a single day, fueled by China’s announcement of fresh economic stimulus measures, CNN reports.
The move, hailed by some as the “bazookas” needed to revive confidence, sent ripples through global markets, benefiting Arnault and other investors. Arnault had previously lost more wealth than any other billionaire in 2024, with his fortune shrinking by $24 billion due to a slump in the luxury goods market.
The dramatic turnaround came after LVMH shares rallied nearly 10% in Paris, buoyed by hopes that China’s leadership would succeed in reviving the economy, potentially boosting demand for luxury goods. LVMH, which generates 31% of its revenue from Asia, reported a 10% drop in sales in the first six months of 2024 in the region, largely due to China’s economic slowdown.
China’s faltering economy has been a major concern for Western brands, as the country grapples with sluggish consumer spending, a property slump, and a mounting debt crisis in local governments.
The recent stimulus measures, including a cut in interest rates and reserve requirement ratios for banks, along with support for the property market, have ignited investor enthusiasm. China and Hong Kong stocks are on track for their best weekly performance in 16 years, with Hong Kong’s Hang Seng index gaining over 12% and mainland China’s blue-chip CSI300 index rising over 15% this week.
While the recent announcements are promising, experts urge caution. The property market, which once contributed 30% to China’s economic activity, remains a major concern. It has been cooling since 2019 and entered a deep slump after government-led restrictions on developers’ borrowing. Stabilizing this sector will be crucial for China’s economic recovery.
