Hong Kong Equities Off Earlier Highs, China Equities Turn Negative

Hong Kong equities surged earlier however are well off the highs, HK markets have out-performed mainland China mainland equities as most indices now trade lower for the day. Tech names have been the largest contributed to today gains after the Fed Reserves signally it remains on track for three rate cuts for the year despite higher inflation have help push markets higher, while Asian gold miners are benefitting from gold prices rose above $2,200 an ounce for the first time. China property developer Radian Holdings defaults on their offshore bonds, while Chinese regulators plans to intensify delistings and finally PBoC still sees room for more RRR rate cuts after strong data

• Hong Kong equities are surging higher on Thursday although we are well off highs in some sectors now, the Mainland Property Index has brushed off Radiance Holdings bond default to trade up 5% at one point and now trade up 3%, while the HSTech Index was up 2.70% at one point and now trades up just 0.80% while the wider HSI is up 1.80%. In China equity markets have turned lower with the CSI300 now down 0.15%, while the smaller cap CSI1000 is 0.20% lower
• China Northbound flows were -5.6 billion yuan on Wednesday, with the 5-day average at 3.62 billion, while the 20-day average sits at 2.911 billion yuan.
• In the Property space today, Chinese developer Radiance Holdings Group Co. defaulted on a $300 million bond amid a sales slump, citing extreme pressure in the property sector and lack of improvement in sales. This default highlights ongoing challenges in China's real estate market, with more defaults expected as home sales remain weak despite policy interventions.
• Chinese regulators will intensify delistings to ensure a stronger market survival mechanism, with five companies delisted this year, primarily due to trading below one yuan, highlighting the importance of maintaining quality in the capital market. Delistings are seen as crucial for enhancing the quality of listed companies, and stakeholders of delisted firms remain accountable for any wrongdoing even after delisting.
• China's deputy governor reaffirmed the possibility of looser monetary policy, stating that there's still room to lower the reserve requirement ratio for banks, which could support the economy. This comes amidst an "observation period" by policymakers following signs of economic strength, with investors eagerly awaiting clues on potential stimulus measures.
• Looking ahead, the calendar is light for the remainder of the week for China, while Hong Kong has Balance Of Payments and CPI data due out later today.