China property shares slip after smaller-than-expected lending rate cut

KWG group

20/06/2023 03:48

** The Hang Seng Mainland Properties Index  .HSMPI  drop
3.7% to one-week low
    ** China cut its lending benchmarks on Tuesday in the first
such easing in 10 months, as authorities seek to shore up a
slowing recovery
    ** The size of the reduction in the five-year loan prime
rate (LPR)  CNYLPR5Y=CFXS , which serves as mortgage reference
rate, was less than expected, according to a Reuters survey
    ** Shares of major developer Country Garden  2007.HK  ease
5%, while smaller peers KWG Group  1813.HK  and Zhenro
Properties  6158.HK  plummet 9% and 8%, respectively
    ** CGS-CIMB Securities says deeper lending rate cuts and
other measures including lower downpayments should be
implemented to boost housing demand and reverse the current weak
trend in the property market
    ** Real estate researcher CREIS says the rate cuts signal
that loosening policies will be rolled out in a faster pace
    ** Nomura last week lowered 2023 and 2024 China GDP growth
forecasts to 5.1% and 3.9%, respectively, from 5.5% and 4.2%, as
the worsening property sector might trigger a new round of
downward spiral
    ** Nomura said although there could be more monetary
stimulus, these measures would most likely have a limited impact
    ** The property sub-index in Hong Kong has gained 13% so far
this month on anticipations of central government introducing
more stimulus to prop up the embattled sector
    ** The 300 Real Estate index  .CSI000952  in China is down
1%
    ** The main Hang Seng Index  .HSI  in Hong Kong slips 1.5%

 (Reporting by Clare Jim)
 ((clare.jim@tr.com))