May 20, 2024 04:56 GMT
HK & China Equities Head Higher, Property Off Morning Lows
ASIA STOCKS
Hong Kong & Chinese equities have opened higher today, the main focus today has been on the property space after the Chinese government announced new measures to support the sectors on Friday, however 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, property indices initially opening lower with the HS Property Index opening down 1.40% however has recovered to now trade up 0.95%, while he Mainland Property Index now trades unchanged for the day. The HSTech Index is up 0.60%, while the HSI is up 0.50%. In China onshore markets, the CSI300 is trading up 0.20% while the the small-cap CSI1000 Index, up 0.30% and the ChiNext is up 0.21%.
- 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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