Hong Kong stocks erase losses as developers rebound amid Evergrande debt concerns while Chinese tech firms struggle

Some Chinese developers are taking steps to ease liquidity pressure while Macau casino stocks regain further footing

Evergrande’s crisis looms large over the market as Citigroup listed lenders with high exposure to mainland property sector

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A man walks past an electronic screen showing the Hang Seng Index near Central in Hong Kong. The market slipped to near a one-year low on September 20. Photo: SCMP

Published: 11:05am, 21 Sep 2021Updated: 5:26pm, 21 Sep 2021

Hong Kong stocks climbed from near a one-year low as the city’s biggest developers and Macau casino operators advanced, sidestepping concerns about a wider fallout from China Evergrande’s debt crisis.

The Hang Seng Index gained 0.5 per cent to 24,221.54 at the close of Tuesday trading. The benchmark slumped 3.3 per cent on Monday to the lowest level since October 2020 amid a sell-off on homebuilders. The Hang Seng Tech Index pared a decline to 0.5 per cent from 1.4 per cent. Markets in mainland China were shut for the Mid-Autumn holiday.

Gains in developers calmed the market as some firms unveiled efforts to raise cash to repay creditors. Guangzhou R&F Properties surged 12 per cent to HK$4.81 after proposing to sell assets to Country Garden for 10 billion yuan (US$1.54 billion). Two of its major shareholders also agreed to lend the firm HK$8 billion (US$1.03 billion).

Country Garden added 8.9 per cent to HK$7.13. Fantasia added 3.9 per cent to HK$0.53 after saying it has enough cash to repay bondholders next month.

“Against the market view, we see regulators keeping a close eye on Evergrande and think it could soon put forward a plan or meaningful progress to reduce the impact,” analysts at Jefferies said in a note to clients. “Marginal loosening on the mortgage quota is possible, which will help property sales and ease their cash flow tightening.”

The Hang Seng Property Index rose from a five-year low. The gauge plunged 6.7 per cent on Monday amid concerns Beijing will next target the city’s richest landlords to help fix the housing shortage. CK Asset Holdings jumped 4.1 per cent to HK$43.55. Sun Hung Kai Properties and New World Development both gained 1.7 per cent.

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