Hong Kong stocks surge as developers pace rebound after China moves to ease funding crunch while Meituan, Alibaba lead tech rebound
- Property developers advance as CBIRC urges lenders to provide financial support to help quicken home delivery, ease housing crisis
- Traders look for more signs of policy support after the Chinese economy grew last quarter at the slowest pace since the onset of pandemic in early 2020
The Hang Seng Index rose 2.7 per cent to 20,820.87 at the close of Monday trading, its strongest gain since June 6. The benchmark slumped 6.5 per cent last week, the worst in two years. The Tech Index added 3 per cent while the Shanghai Composite Index advanced 1.6 per cent. The Hang Seng Mainland Properties Index jumped 3.7 per cent, reversing a 10-day slide.
Country Garden surged 6 per cent to HK$3.51 while China Overseas Land added 3.8 per cent to HK$23.05. Longfor Group climbed 4.1 per cent to HK$29.15. Meituan jumped 5.9 per cent to HK$189.70, while Alibaba Group Holding added 1.7 per cent to HK$103.90. China Merchants Bank advanced 3.4 per cent to HK$42.75.
The news is “a boost to confidence to a certain extent,” said Stanley Chan, research director at Emperor Capital. “Going forward, we need further evidence. Rate cuts from China’s central bank in the third quarter will be stronger support for property.”
The latest instruction comes as the havoc wreaked by China’s most indebted developers spread wider into the real economy, prompting a revolt by homebuyers in some 100 projects across the nation.
China’s economy grew 0.4 per cent in the second quarter, the slowest pace since the Covid-19 pandemic broke out in early 2020. The recovery momentum in June may not be sustainable, as pent-up demand for auto post-lockdown looks to be temporary in nature, according to Goldman Sachs. Goldman and ANZ were among banks downgrading China’s GDP forecasts over the past month.
The Hang Seng Index has lost 4.6 per cent this month, erasing all the gains from Shanghai’s June 1 reopening as a flare-up in new Covid-19 cases and property-market concerns eroded confidence. The index’s 69 members have lost US$381 billion in market value this year through July 15.
Zhecheng Huifeng Diamond Technology rose 3.6 per cent to 29.20 yuan in Beijing on the first day of trading, while China Graphite soared 143 per cent to HK$0.79 in Hong Kong.
Major Asian markets rose on Monday. South Korean stocks added 1.9 per cent, while Australian equities advanced 1.2 per cent.