China developers’ stocks and bonds buoyed by hope for central bank monetary support, as Beijing expands bond programme

The Hang Seng Mainland Properties Index rose 4.3 per cent on Wednesday, and some developers’ bonds soared

Traders were buoyed by the expansion of a bond financing programme, betting on more support from authorities, especially the central bank

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Construction cranes operate alongside residential buildings in Beijing on September 26, 2022.Photo: EPA-EFE

Published: 6:30pm, 9 Nov 2022Updated: 7:31pm, 9 Nov 2022

Chinese property stocks and bonds soared on Wednesday as authorities vowed to aid bond financing and investors placed bets on direct monetary input from the central bank to buoy developers.

The Hang Seng Mainland Properties Index jumped 4.3 per cent on Wednesday and has soared 27 per cent so far this month – beating an 11 per cent gain on the Hang Seng Index in the same period.

Cifi Holdings jumped 28.6 per cent, Seazen Group rose 17.9 per cent and Country Garden gained almost 14 per cent in Hong Kong on Wednesday.

The rallies came after China’s National Association of Financial Market Institutional Investors (NAFMII) said it will expand a bond financing programme for private companies including home builders, expanding debt financing to 250 billion yuan (US$34.5 billion) from an unspecified amount earlier, according to a statement on its official website on Tuesday night. The scale could be further widened depending on actual situations, it added.

Residential buildings under construction in Ruili in China’s Yunnan province on August 10, 2022. Photo: Bloomberg

Investors were also buoyed by a Wednesday article in Financial News, a newspaper managed by the People’s Bank of China, which forecast that the property market would gradually bottom out and stabilise this year.