International Uptick, Property Sector & Bank M&A Hope Provide Bid To Start The Week

Positive leads from the U.S. post-Friday’s data and the KOSPI (as South Korean securities regulators announced a short selling ban) aided Chinese equities on Monday.

• Still, the benchmark CSI 300 index lagged the likes of the Hang Seng and Japan’s Nikkei 225.
• Recently, a Shenzhen regional supervisory body played down any worries re: financial and managerial risks at property developer China Vanke, per reports in the local press. The regulatory body also tried to provide assurance as it highlighted the ability of authorities to support the company if such needs arise.
• This news came after the close. Vanke equities had already rallied on the back of reports that it planned to hold an online conference with financial institutions on Monday re: operating conditions.
• This supported the wider property developer sphere. The CSI 300 real estate sub index added over 4% come the close as a result.
• Elsewhere, brokerage names benefited from securities regulator comments re: supporting M&A activity to promote the creation of highly ranked investment banks.
• Also note that a CASS researcher suggested that China should expand government debt and boost credit to drive the growth of financial assets in society which will increase nominal income and help restore consumption in the short-term.
• On the flow front, the rally in global equities helped to promote a third straight round of net daily inflows for Chinese equities via the HK-China Stock Connect schemes, although the CNY5.3bn of net purchases was shy of Friday’s multi-week high (CNY7.1bn).