Following Beijing’s “most comprehensive” support measures aimed at boosting liquidity in the property sector, Hong Kong’s bourse closed in positive note, up nearly 300 points on Monday, mainly driven by Chinese property developers.
The Hang Seng Index climbed 294 points to 17,619 at the close after opening more than 600 points higher. Market turnover on the main board was HKD204.9 billion. Meanwhile, the onshore yuan soared to a nearly two-month high.
Earlier on, the investment bank Morgan Stanleyhad forecast capital will return to the global stock market next year and has raised its forecasts on the HSI. The target of the city’s benchmark will be lifted to 18,200 from 16,900 under the base case.
Property heavyweights such as Country Garden rallied 45.5 percent to hit an over three-month high. Logan Group, KWG Group, Agile Group and R&F Properties all soared more than 30 percent.
The property stocks rally came after China unveiled a 16-point plan to bail out the real estate market, including loan repayment extensions.
A closer examination at the property sector’s performance suggests that the easing measures will more likely benefit developers that have yet to default, while the polarization between stronger and weaker firms may persist for now.
