Hong Kong stocks advanced for the third straight day yesterday, thanks to support from property plays which were expected to benefit from the mortgage rate cut announced by the city's biggest lender, HSBC.
HSBC joined the mortgage price war among local banks on Wednesday, slashing its interest rates by 50 basis points and offering home loans at 2.75 per cent below the prime rate - or 5 per cent in real terms - until the end of next month.
The announcement buoyed the recently sluggish property counters, as lower mortgage rates are expected to encourage more potential homebuyers to enter the property market.
Sino Land was the top blue-chip performer, jumping 6.02 per cent to $11.45. Henderson Land rose 1.42 per cent to $39.20, Sun Hung Kai Properties gained 0.97 per cent to close at $77.70 and New World Development finished 0.86 per cent firmer at $11.70.
Ricky Cheung, a fund manager at Phillip Asset Management, said the mortgage rate cut was positive for developers as it would help to stimulate buying interest in the property market, especially in newly launched residential projects.
Property stocks had relatively lagged behind high-flying H shares and in the new rate environment, investors might shift to property plays in the short term, he added.
