Hong Kong stocks surge to 7-week high on property market speculation as China pledges regulatory predictability amid market intervention
- Calls for removal of property market curbs have grown louder in recent weeks as Hong Kong prepares its budget for next fiscal year
- China’s ‘national team’ is seen stepping up market purchases, following a recent surge in net assets of top onshore exchange-traded funds
The Hang Seng Index rallied 1.6 per cent to 16,503.10 on Wednesday to reach the highest level since January 5. The Tech Index soared 2.7 per cent, while the Shanghai Composite Index climbed 1 per cent.
Sun Hung Kai Properties advanced 3.7 per cent to HK$75.15, Henderson Land added 2.8 per cent to HK$21.90 while New World Development climbed 4.6 per cent to HK$9.79. The Hang Seng Property Index rose 3 per cent to a one-month high. Tech stocks also rallied, as Alibaba Group strengthened 1 per cent to HK$72.90 and Tencent rose 1.6 per cent to HK$288.80 while Meituan appreciated 4.9 per cent to HK$77.
The benchmark index pared a rally of as much as 3 per cent as HSBC slumped 3.8 per cent to HK$60.25. The UK lender reported a 56 per cent jump in net profit in 2023, as net interest margin slimmed in the final quarter and credit losses weighed on results.
The Hang Seng Index has risen 6.6 per cent this month, clawing its way up from a 14-month low in January as Beijing stepped up measures to repair investor confidence. The rebound in February has restored US$200 billion of value to the city’s stock market through February 20, according to Bloomberg data.
Remove property curbs as people’s ‘assets are disappearing’: Midland chief
Financial secretary Paul Chan Mo-po will deliver the city’s budget on February 28 as traders bank on measures to jump-start the local economy. Some industry veterans have also called on Chan to dismantle market hurdles as asset values diminished. The government imposed curbs to cool a speculative frenzy in the 1990s.
Stewart Leung, chairman of the Real Estate Developers Association, said he recently briefed Chan on the state of the industry and that the government has taken note of the market’s concerns and issues affecting the economy.
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“The government continued to provide liquidity and support to the market,” Kelly Chung, investment director and head of multi-asset at Value Partners, said in a note on Wednesday. Still, sentiment will be solidly lifted with concrete details of the policy, she added.
China’s state funds seen stepping up stock intervention after jump in ETF assets
Longfor soared 9.5 per cent to HK$10.04 and peer China Resources Land jumped 4.9 per cent to HK$25.60, leading gains among mainland developers. The nation’s commercial banks on Tuesday cut the five-year loan prime rate cut by a record 25 basis points, a signal that policymakers are worried about the housing market slump.
Other major Asian markets mostly traded lower, tracking weaker overnight US equities The Nikkei 225 in Japan fell 0.3 per cent and the S&P ASX 200 in Australia declined 0.7 per cent, while the Kospi Index in South Korea lost 0.2 per cent.
