Hong Kong stocks complete four-week rally on China easing bets while Evergrande tempers bond default risks

Stock benchmark rose for a fourth week on optimism about China easing measures to support housing market amid an industry slump

Evergrande default concerns eased as developer was reported to have paid interest to offshore bondholders before Saturday’s deadline

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A worker walks in front of an electronic board showing the Hang Seng Index in Central, Hong Kong. Photo: AP

Published: 10:59am, 22 Oct 2021Updated: 4:56pm, 22 Oct 2021

Hong Kong stocks logged the biggest gain in eight months as property developers surged on China policy easing bets. Evergrande jumped on media reports that it has paid a bond interest to offshore investors.

The Hang Seng Index rose 3.1 per cent this week to 26,126.93, the most since the opening week of February to complete a four-week rally. The Hang Seng Tech Index advanced 6.9 per cent, the most in eight weeks. The Shanghai Composite Index closed 0.3 per cent weaker at 3,582.60.

Longfor Group rose 6.6 per cent, while China Resources Land added 3.8 per cent and Sunac China surged 8.4 per cent. A measure of property stocks in Shenzhen rose by about 4.7 per cent in the past two days, the best back-to-back win in seven weeks.

The China Banking and Insurance Regulatory Commission said on late Thursday that authorities will support first-time homebuyers and banks will start easing mortgage financing, following a report showing home prices shrank last month. It however pledged to retain the broader curbs on sector leverage.

“The concerns on the property industry seems to have eased with speculative capital flowing back into them,” said Alvin Cheung, associate director at Prudential Brokerage in Hong Kong. Investors should remain vigilant because China still keeps a tight control on the sector, he added.

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