China & HK Equities Mixed, China Cuts LPRs

Chinese and Hong Kong equities are mixed today, with Hong Kong equities playing catch-up after underperforming on Friday. The PBoC cut interest rates this morning in order to boost sentiment, however onshore markets have largely ignored this. It was largely suspected that Friday out-performance from onshore markets was tied to the China National team stepping in to support the market, with those moves being erased today. Investors have growing concerns around a lack of any major support announced for the struggling property sector out of the Third Plenum last week.

• Hong Kong equities are mostly higher today, with the exception of property indices which are trading slightly lower (Mainland, -0.33%, HS Property, -0.15%), while the HSTech Index is trading 1.50% higher and the HSI is up 0.65%.
• China onshore markets have erased most of Friday's gains, with the CSI 300 down 0.75%, small-cap indices are faring better with the CSI 1000 up 0.40% and the CSI 2000 up 0.62%
• China has pledged to accelerate a housing model emphasizing renting and affordable homes following a record property slump, with plans to support local government efforts to upgrade housing and ease property ownership restrictions. While it was reported by BBG that China Fortune Land Development is attempting to resolve its debt by working with a buyer to purchase bonds at deeply discounted prices and then canceling them. The company has been negotiating private contracts with bondholders and a third party, offering 10 yuan for every 100 yuan of bond principal, the companies USD bonds were last trading at between 2-4c on the dollar.
• Trump has expressed support for Chinese automakers building factories in the US to boost the economy, in contrast to President Biden's approach of blocking cars linked to China. Trump suggested imposing tariffs up to 200% on cars made in Mexico by Chinese companies if they don't build plants in the US, while the Biden administration has scrutinized vehicles with Chinese ties and sought to exclude Chinese government-owned firms from tax credits.
• Later today with have Hong Kong CPI Composite.