Touted Deleveraging Push Weighs Into Close

Benchmarks struggled on Wednesday, CSI 300 -1.3% and Hang Seng -2.2%.

• Country Garden’s wind up notice weighed on mainland property market sentiment.
• Conversely, Hong Kong property developers benefitted from a meaningful easing of property purchase restrictions in the Budget.
• The HK Budget also focused on attracting foreign investment flow and tourism.
• Flows via the HK-China Stock Connect were a minor net positive for the mainland (net inflows of CNY1.3bn).
• Online game providers benefited from China’s latest batch of approvals, which came after hours on Tuesday.
• A tighter regulatory stance has provided some support in recent weeks. With fresh headlines seen after market.
• BBG sources suggested that “some quantitative funds were told to stop taking new investments from clients and phase out existing products for “Direct Market Access,” a strategy that is often highly leveraged. The gradual exit would help prevent drastic selloffs.”
• These headlines seemed to apply pressure, with the focus on deleveraging weighing into the close, despite the “measured” approach identified by the article.