China property shares in HK jump on report of government plans to buy unsold homes (updated)

CIFI Holdings (Group)

16/05/2024 03:16

(Adds details)
       HONG KONG, May 16 (Reuters) - Shares of Chinese property
developers in Hong Kong jumped on Thursday, after a report that
China is considering a plan for local governments nationwide to
buy millions of unsold homes from distressed companies to ease a
protracted property crisis.     
    Hong Kong's Hang Seng Mainland Properties Index  .HSMPI 
firmed more than 4% in early trading, with state-backed
Sino-Ocean Group  3377.HK  surging 46%, and defaulted private
developers CIFI Holdings  0884.HK  and Shimao Group  0813.HK 
gaining 21% and 18%, respectively.
    Hong Kong's markets were closed on Wednesday for a public
holiday and were catching up to gains in mainland property
shares the previous day.     
    Bloomberg News said on Wednesday the State Council is
gathering feedback on the preliminary plan from various
provinces and government bodies, after a meeting of the ruling
Communist Party leaders called for efforts to clear mounting
housing inventory.
    The report sent the CSI mainland real estate index
 CSI000952  up 6% at one point before paring gains. It rose 0.9%
on Thursday.
    Local state-owned enterprises would be asked to help
purchase unsold homes from distressed developers at steep
discounts using loans provided by state banks, according to the
report, adding that many of these homes would then be converted
into affordable housing.    
    China's property sector slipped into a debt crisis in
mid-2021. Since 2022, waves of policy measures have failed to
turn around the sector that represents around a fifth of the
economy and remains a major drag on consumer spending and
confidence.

 (Reporting by Clare Jim; Editing by Kim Coghill and Janane
Venkatraman)
 ((clare.jim@thomsonreuters.com;))