HK & China Equities Turn Lower, Country Garden Issued Wind-up

Hong Kong and China equities have opened mixed today, but have turned lower as the day has progressed. Hong Kong Budget and GDP were released earlier, with a focus on the property sector, while Macau gaming operator Galaxy Entertain missed their earnings forecast

• Equities markets are mixed, tech were up as much at 1.20% earlier only to have traded lower over the day to now be flat. Property again under-preforms on the back of Country Gardens Wind-up notice, with the mainland property index down 1.73%, while the HSI is down 0.20%. In China, indices have turned lower throughout the day early gains in growth stock have been completely reverse with the CSI100 up as much as 1.50% earlier to now trade 1.40% on the day, while the CSI300 trade down 0.10%
• China Northbound flows were +12.24b yuan on Monday, the forth highest daily inflow since July 2023, the other three have occurred in the past month.
• Major companies with earnings due out today include Baidu Inc and Sun Hung Kai Property. Baidu will be closely watched as earnings are expected to have grown by the slowest rate in a year, while investments in AI may also be a drag on results. Galaxy Entertainment the Macau Casino and Hotel company missed their earnings forecast earlier, although occupancy rates in their hotels remained near 100%.
• Earlier Chinese Property developer Country Garden was issued with a wind-up notice in a Hong Kong court with the first hearing expected to take place on May 17th, this follows from yesterday when China Vanke Co was reported to be in talks for a debt restructure.
• Hong Kong's GDP and Budget were released earlier with GDP coming in at 4.30% YoY inline with expectations, while QoQ was 0.4% vs 0.5% expected. The focused for the budget was on the easing of property curbs after house prices had fallen to the lowest in seven years, measures to curb housing demand have been cancelled with immediate effect. Other parts of the budget have been focused on improving tourism and hosting events with an additional HK$1.1B in funding, while there is also a focus on attracting foreign investment inflows.
• Looking ahead to Thursday, HK has Budget Balance and Money Supply data due, while the China calendar remains empty.