Hang Seng Outperforms Mainland, Property Sector Remains In Focus

The benchmark CSI 300 added 0.2% on Monday, while Hong Kong’s Hang Seng added a more meaningful ~1.9%. The latter benefitted from outperformance in the tech sector.

• After the close Bloomberg sources reported that “Chinese regulators are drafting a list of 50 developers eligible for a range of financing,” as policymakers look to deepen support for the embattled sector.
• The Hang Seng property index saw some notable outperformance vs. its CSI 300 equivalent on Monday, with the BBG report likely to provide support early on Tuesday.
• The broader property sphere looked to comments after Friday’s regulatory meeting pledging to meet the sector’s “reasonable” funding needs (a reiteration of previous language, but coming from another source) on Monday/
• Within the sector, Sunac garnered further support as it expects all conditions for its offshore restructuring proposal to be satisfied.
• An unchanged round of LPR fixings from the PBoC did little for wider sentiment, although most looked for no move there.
• A note from J.P.Morgan re: Chinese air carrier turnover/activity expectations seemed to support that sector.
• Flow wise, offshore investors lodged net purchases of mainland equities via the HK-China Stock Connect on Monday. While these flows totalled a modest net 1.4bn, they represented only the second round of net purchases of mainland equities via those channels in ten sessions.