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China & Hong Kong Equities Higher, EV Manufacturers Hit Trouble

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Hong Kong & Chinese equities have opened higher today, the main focus again today with will on the housing market many analysts have mixed views on how much the recent announcements will do to help the struggling sector, while China EV makers are taking longer than ever before to pay their suppliers. Earlier, China left the 1 & 5yr LPRs unchanged.

  • Hong Kong equities are mostly higher today other than the mainland property Index which is trading about 1% lower, although off earlier lows, the index is now up 41% from lows made on Apr 19th. The HSTech Index is up 0.90%, while the HSI is up 0.60%. In China onshore markets, the CSI300 is trading up 0.50% slightly underperforming the small-cap CSI1000 Index, up 0.70% and the ChiNext up 0.74%.
  • On Friday, The Chinese government announced a comprehensive support package to revive its struggling property market, including relaxed mortgage rules and encouraging local governments to purchase unsold homes. This move aims to mitigate the sector's impact on economic growth. The measures include lower down-payment requirements, central bank funding, and various incentives to stabilize the market. However, there are concerns about whether these measures will be sufficient to address the deep-rooted issues within the property sector and stimulate long-term demand.
  • China's electric car market is facing significant stress, with companies like Nio and Xpeng taking much longer to pay suppliers due to sluggish economic growth, reduced demand, and intense price wars. This delay is impacting auto-parts suppliers, increasing their receivables and reducing cash reserves, potentially leading to a "messy consolidation" as weaker suppliers face bankruptcy, per bbg.
  • Looking ahead, quiet week for China on the data front, Hong Kong has Unemployment Rate later today
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Hong Kong & Chinese equities have opened higher today, the main focus again today with will on the housing market many analysts have mixed views on how much the recent announcements will do to help the struggling sector, while China EV makers are taking longer than ever before to pay their suppliers. Earlier, China left the 1 & 5yr LPRs unchanged.

  • Hong Kong equities are mostly higher today other than the mainland property Index which is trading about 1% lower, although off earlier lows, the index is now up 41% from lows made on Apr 19th. The HSTech Index is up 0.90%, while the HSI is up 0.60%. In China onshore markets, the CSI300 is trading up 0.50% slightly underperforming the small-cap CSI1000 Index, up 0.70% and the ChiNext up 0.74%.
  • On Friday, The Chinese government announced a comprehensive support package to revive its struggling property market, including relaxed mortgage rules and encouraging local governments to purchase unsold homes. This move aims to mitigate the sector's impact on economic growth. The measures include lower down-payment requirements, central bank funding, and various incentives to stabilize the market. However, there are concerns about whether these measures will be sufficient to address the deep-rooted issues within the property sector and stimulate long-term demand.
  • China's electric car market is facing significant stress, with companies like Nio and Xpeng taking much longer to pay suppliers due to sluggish economic growth, reduced demand, and intense price wars. This delay is impacting auto-parts suppliers, increasing their receivables and reducing cash reserves, potentially leading to a "messy consolidation" as weaker suppliers face bankruptcy, per bbg.
  • Looking ahead, quiet week for China on the data front, Hong Kong has Unemployment Rate later today