General Property Bid Extends In Late HK Trade, Supporting Wider Indices

The CSI 300 finished 0.5% firmer on Thursday.

• The Hang Seng extended its bounce from worst levels of the session into the close, with BBG sources flagging “unprecedented” property developer support via unsecured loans. The index was 1% higher at the close.
• Property names had already outperformed on both the mainland and in HK, with top level CCP communique re: lenders providing funding for the sector filtering in early on.
• Lenders struggled on the same news.
• Wednesday’s BBG report re: troubled names such as Country Garden being included in the seemingly impending funding support schemes also factored in at the open.
• Note that measures to spur demand for property in Shenzhen weighed on/limited developers operating in the city earlier in the session.
• The CSI 300 property sub-index was 3.2% firmer, while the Hang Seng equivalent added 1.8%.
• That outweighed any worry after BBG sources flagged severe insolvency fears at troubled shadow lender Zhongzhi late Wednesday.
• Baidu continued to benefit from better-than-expected corporate earnings.
• Note that international participants were net buyers of mainland shares via the HK-China Stock Connect links, aiding the rally. They acquired a net CN 5.1bn of mainland equities on the day.