China, Hong Kong stocks jump as policy relief fires up property, banking shares
Property and banking shares surged, after China's securities regulator said it would allow China- and Hong Kong-listed Chinese developers to sell additional shares, lifting a six-year-old ban. The announcement followed government measures to expedite lending and bond financing to China's struggling real estate sector.
- Country:
- China
Stocks in China and Hong Kong bounced sharply on Tuesday, as investors snapped up property and bank shares after regulators broadened equity financing channels for developers, easing fears of a debt crisis in the world's second-biggest economy. China's bluechip index CSI300 rose nearly 3% by the lunch break, while the Shanghai Composite Index gained 2.2% to a two-month high. Hong Kong's stock benchmark Hang Seng shot up nearly 4%.
Tuesday's euphoria contrasted with pessimism the previous day as the CSI300 gauge dropped as much as 2.7% and Hang Seng ended 1.6% lower amid worries about rare protests against strict COVID-19 curbs in China as infections rise. Property and banking shares surged, after China's securities regulator said it would allow China- and Hong Kong-listed Chinese developers to sell additional shares, lifting a six-year-old ban.
The announcement followed government measures to expedite lending and bond financing to China's struggling real estate sector. "Deep-pocketed, long-term, and adamant investors are entering the market," said Mark Dong, Hong Kong-based co-founder of Minority Asset Management.
With listed developers allowed to issue shares, "the market is no longer worried that some property firms would collapse." An index tracking China-listed shares jumped 8% to the highest level in six month, while Hong Kong-listed Chinese developers surged more than 9% to a two-month high.
A slew of China-listed developers, including Vanke , Jinke Property and Financial Street jumped to their daily limit of 10%. In Hong Kong, Country Garden was up 9%, and Longfor Group surged 12%. The strong market reaction shows the latest measure "is more heartening than previous policies" said Yuejin Yan, head of research at the Shanghai E-house Real Estate Research Institute.
The combination of China's "three arrows" to aid the property sector - to facilitate lending, bond sales and equity financing - "would greatly improve developers' liquidity conditions“, he said. Banking shares also surged, as investors bet a healthier property market would reduce the risk of bad loans.
Financial stocks rose 3.6% in Hong Kong; they jumped nearly 6% in China, on track for their best day in two years. Hong Kong's tech stocks also climbed sharply, with an index tracking the sector up 5.5%.
(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)
- READ MORE ON:
- Hong Kong
- Hong Kong-
- China
- Chinese
- Hang Seng
- Shanghai
- China-
- Hong Kong's
ALSO READ
Biotech trade association to split with China's WuXi AppTec
China's foreign minister to visit Australia next week as ties improve
Probe begins after 7 killed, 27 injured in fried chicken shop explosion in China
Taiwan, China dispatch teams to join boat rescue mission near Taiwan-controlled islands
Taiwan, China join rescue mission near sensitive islands