China & Hong Kong Equities Are Higher, Property and Tech Leading The Way

Hong Kong and China equities are higher today, the property sector has surged on CIFI holdings after the company announced an agreement with a group of bondholders regarding its offshore liquidity situation, with property indices now in bull market territory, Germany may reconsider plans to tighten screening o of Chinese investments. It is a quiet day for economic data, locally this week we have China PMI on Tuesday and Hong Kong GDP on Thursday, while the Fed reverse decision on Thursday will also be closely watched

• Hong Kong equities are surging higher today with the HSTech Index up 0.96% after breaking back above the 200-day EMA on Friday and is now up about 16% from lows on the Apr 19th. The Mainland Property Index up 4.72% at 1,375.84 and is now up 21.20% from lows on Apr 19th with resistance now at the 200-day EMA, a level we have not traded above since June 2021, while the wider the HSI is up 1.10%. China Mainland equities are again underperforming this morning, with the CSI300 up 1.33%, the index has finally broken above the 200-day EMA, a level we have failed to break 5 times over the past month, small-cap indices are performing slightly better with the CSI1000 and CSI2000 both up about 2% while the ChiNext has surged 3.60%.
• China Northbound had an inflow of 22.4b yuan on Friday the largest inflow on record. The past 5-day saw just a single day of outflows, with a total inflow of 25.8b yuan. The 5-day average at 5.15billion, while the 20-day average sits at 0.18billion yuan.
• In the property space, Chengdu, a major city in southwest China, has lifted home-buying restrictions to stimulate real estate demand and economic growth, removing qualification reviews for home buyers and aiming to meet financing needs for property companies. This move follows similar actions in other Chinese cities amid a prolonged real estate downturn, which has weighed on economic growth and prompted concerns from authorities about market stabilization. CIFI Holdings shares surged by up to 25% alongside other Chinese property shares after the company announced an agreement with a group of bondholders regarding its offshore liquidity situation. The agreement involves holders controlling approximately 43% of CIFI's senior notes, perpetual securities, and convertible bonds. Additionally, there are currently no ongoing legal proceedings against the company initiated by any creditors
• Germany is reportedly reconsidering plans to tighten screening of Chinese investments, with fears that such scrutiny could impede economic revitalization efforts; however, the economy ministry spokesman couldn't confirm these claims. The proposed bill aims to expand government powers to review foreign investments for security risks, including in advanced technology sectors, but discussions are ongoing about its provisions and the need to balance security concerns with openness to foreign investment, according to the WSJ.
• Looking ahead, China PMI on Tuesday and Hong Kong GDP on Thursday.