Lower To Finish The Week, Banks Struggle On Property Support Speculation

The CSI 300 shed 0.7% to end the week, while the Hang Seng saw a more pronounced 2.0% loss.

• That left the former lower on the week, while the latter pared the bulk of the gains that had been seen since last Friday’s close.
• The potentially negative impact of the seemingly impending round of “unprecedented” property support via unsecured loans to qualified lenders for banks received the most airtime, on both the wires and via sell-side analysts.
• This also had some spill over for the property sector, given the risks that such lending could promote.
• Earnings headwinds for Hong Kong names (on net) was flagged as another source of pressure for the space, helping explain the sharper round of losses on the Hang Seng.
• Automaker BYD struggled on the back of reports of steeper price cuts for certain models produced by the name.
• Names in the pharmaceutical sector surged, with wires pointing to the WTO seeking detailed information re: a jump in respiratory issues amongst Chinese children.
• Venture capital names benefitted from sentiment surrounding early-stage companies listed on the Beijing Stock Exchange, owing to policymakers flagging fresh financial support for firms listed there.
• Cross-border flow will have also contributed to the weakness, with offshore investors shedding a net CNY6.2bn of mainland equities via the HK-China Stock Connect links on the day.