Firmer As Supportive Measures Get More Traction, Generate Inflow From Offshore

Wednesday saw the CSI 300 add 1.4%, while the Hang Seng added 1.6%.

• Focus fell on the continued swelling of the financing “whitelist” covering property projects.
• Tailwinds from yesterday’s 5-Year LPR fixing were also touted.
• HK property indices outperformed the mainland, with fiscal speculation providing further support ahead of next week’s budget planning announcement.
• There were also discussions re: an upturn in expectations surrounding the HK insurance industry, promoting some outperformance in related names.
• Elsewhere, the clampdown on short selling activity by quant funds was touted as supportive.
• Note that some quant funds denied rumours of bankruptcy/forced liquidation of positions after the recent market rout.
• Still, market participants expect/remain hungry for further support, whether stock-specific or via broader policy levers.
• On the former, local outlets noted that a potential suspension of Chinese onshore stock listings is being discussed as authorities seek to shore up the domestic market. The reports cited “experts” who attended a CSRC meeting on Sunday.
• Local reports also pointed to the CSRC Chair meeting with retail investors at a brokerage on Monday.
• After the close we saw headlines surrounding the need to expedite the drafting of laws surrounding promoting the private economy, a well-known policy focus.
• On the flow side the latest policy measures seemingly facilitated the largest round of net mainland inflows via the HK-China Stock Connect links since July ’23 (CNY13.6bn).
• We also note that margin usage has ticked away from the pre-LNY lows, which suggests that those with a bullish view have started to open levered positions.