Hong Kong stocks complete best month since January 2023 on property tonic, China market intervention

Hang Seng Index rose more than 6 per cent this month, aided by the latest property market stimulus and China’s market intervention moves

China’s ‘national team’ made some of the biggest purchases in the onshore market this year, helping stem an exodus of global funds

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Screens showing the Hang Seng Index and stock prices outside the Exchange Square in Central on February 15. Photo: Sun Yeung

Published: 11:13am, 29 Feb 2024Updated: 5:38pm, 29 Feb 2024

Hong Kong stocks logged the best monthly gain since January 2023 as the city’s government took steps to revive the property market. investor sentiment improved after China’s state-run intervened to arrest a slump in confidence, while authorities curbed trading disruption by hedge funds.

The Hang Seng Index gained 6.6 per cent in February to 16,511.44, the most since a 10 per cent surge 13 months ago. The benchmark slipped 0.2 per cent on Thursday, surrendering an earlier 1 per cent advance. The Tech Index was little changed, while the Shanghai Composite Index jumped 1.9 per cent.

In Thursday trading, Sun Hung Kai Properties strengthened 1.2 per cent to HK$78.95 while its peer Wharf REIC added 0.6 per cent to HK$26.15. China’s biggest chip maker SMIC surged 5.9 per cent to HK$16.78 while Xinyi Solar surged 24 per cent to HK$4.76 after reporting a 9.6 per cent increase in 2023 profit that exceeded analysts’ estimates.

Search engine operator Baidu’s 6.6 per cent slid to HK$99.55 while Budweiser lost 5.3 per cent to HK$12.86 after both published weak earnings reports. Alibaba Group slipped 1.8 per cent to HK$72.90 and peer JD.com retreated 2.4 per cent to HK$89.05.

Local stocks rose to the highest level this year earlier this week, after builders rallied on property market speculation. Financial Secretary Paul Chan Mo-po removed decade-old curbs on home purchases and property financing limits during the Budget address on Wednesday.

“Property prices are expected to stabilise on the stimulus measures,” said Philip Tse, an analyst at Bocom International. Tax cuts can bolster buyers’ sentiment and release pent-up demand over the next two or three months, he added.

February’s rally was also underpinned by China’s state-run funds, which have ploughed a net 410 billion yuan (US$57 billion) of cash into exchange-traded funds onshore this year to put a floor under the stock market, UBS said.