* China bans TV and radio ads for luxury gifts
* China the fastest-growing luxury goods market
* Watchmaker shares coming off recent strong run
ZURICH, Feb 7 Shares in Swiss watchmakers Swatch
Group and Richemont fell on Thursday after the
government in China, the industry's fastest growing market,
banned TV and radio advertisements for expensive gifts.
The ban, announced by China's state news agency Xinhua on
Wednesday, followed repeated calls from China's
president-in-waiting Xi Jinping for a crackdown on graft.
Shares in the world's biggest watchmaker Swatch Group, which
have gained almost 16 percent this year, were down 3.3 percent
to 516 Swiss francs at 1445 GMT.
Rival Richemont was down 1.9 percent at 74.40
"I think you are seeing profit-taking coming into the
stocks, triggered by the news that the Chinese government is
going to ban TV and radio ads for watches in gifting," Kepler
Capital Markets analyst Jon Cox said.
Luxury goods groups have seen double-digit growth rates in
China, where the number of rich consumers has increased rapidly,
but growth has slowed recently as China's economy loses steam
and luxury goods become a target of the anti-corruption fight.
A survey from the Hurun Report, known for its annual China
Rich List, showed last month that the crackdown on lavish
spending had pushed expensive liquor and high-end watches out of
favour in the luxury gift-giving market.
Kepler's Cox said mainland China represented about 10
percent of the market for Swiss watches.
"There is probably another 40 percent of the market where
Chinese dominate such as Hong Kong, Singapore, other parts of
greater China and also tourists in Europe, and here the outlook
still appears positive," he said.
Vontobel analyst Rene Weber said the announced ban was
mainly hitting Chinese shares.
Shares in Chinese watch retailers Emperor Watch and
Jewellery and Hengdeli, in which Swatch has
a stake, fell on Wednesday and Thursday.
Exane BNP Paribas analyst Luca Solca said the ban had only a
limited negative impact on personal luxury goods shares given
their makers mainly relied on print ads.
(Reporting by Silke Koltrowitz; editing by Jason Neely)