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People walk past an electronic board showing the closing Hang Seng Index number in Mong Kok on June 1, 2020. Photo: SCMP / Edmond So
BusinessChina Business

Hong Kong stocks cap best week in July as China pledges to stem housing rot, Alibaba and Meituan lead tech winners

  • China’s banking regulator will work with the central bank to stem a property crisis and mortgage boycott, an official says
  • Alibaba and Meituan lead tech winners as the closure of Didi Global probe fuels speculation on end of crackdown
China stock market
Zhang Shidong
Zhang Shidongin Shanghai
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Hong Kong stocks advanced, taking the benchmark index to its best weekly gain this month after China’s banking regulator pledged to take measures to defuse a property and banking crisis caused by a credit squeeze.

The Hang Seng Index gained 0.2 per cent to 20,609.14 at the close, bringing the gain to 1.5 per cent for the week. The Hang Seng Tech Index gained 0.3 per cent on hopes for an end to a sector crackdown, while the Shanghai Composite Index slipped 0.1 per cent.

China Merchants Bank advanced 1.5 per cent to HK$42.85 and Industrial and China Construction Bank climbed 0.6 per cent to HK$4.97. Agile Group led gains among mainland developers, adding 0.8 per cent to HK$2.59.

The China Banking and Insurance Regulatory Commission will work with the central bank, the housing ministry and local governments to ensure the delivery of uncompleted houses to fend off social instability, Liu Zhongrui, an official with the regulator’s statistics department, said at a briefing in Beijing on Thursday.

The authorities will also support the property industry and funding access, he added, in a week where homebuyers have threatened to stop servicing their mortgage loans because of stalled projects and delayed deliveries by cash-strapped home builders in central Henan province and elsewhere.

China deploys bad-loans expert to clean up Henan’s festering banking and property mess

“It is expected that the property market will stabilise in the second half with more policy easing and local governments implementing bailout measures,” said Yang Kan, an analyst at Ping An Securities. “Developers are still facing big pressure because of weak sentiment and confidence in the industry.”

Alibaba Group added 0.1 per cent to HK$102.10, while Meituan advanced 0.7 per cent to HK$191.70 on speculation Beijing will end its crackdown on the big internet-platform operators. China this week wrapped up a year-long cybersecurity probe into Didi Global. Earlier, Alibaba was fined a record 18.2 billion yuan and Meituan 3.4 billion yuan for monopolistic practices.

The Hang Seng Tech has risen 32 per cent from a March low, recouping US$332 billion in market capitalisation. Mainland traders bought HK$130 billion (US$16.6 billion) of Hong Kong-listed stocks through the Stock Connect over the same period, according to exchange data.

In Shanghai, the nation’s No. 1 liquor producer Kweichow Moutai added 0.4 per cent to 1,947.39 yuan, after saying earnings in the first half likely increased about 20 per cent from a year earlier.

Contemporary Amperex Technology added 2.1 per cent to 532 yuan. The world’s biggest maker of lithium-ion batteries plans to invest as much as 14 billion yuan to build new production lines in the northern province of Shandong.

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