China property shares surge on stimulus expectations

KWG group

02/06/2023 08:35

** The Hang Seng Mainland Properties Index  .HSMPI  extends
gains to over 9% in the afternoon session, to the highest in
more than one week
    ** Analysts attribute rally to speculation that regulators
will further loosen policies to prop up the embattled property
sector
    ** Defaulted KWG Group  1813.HK  and Logan Group  3380.HK 
surge 22% and 17%, respectively, while Sunac China  1918.HK 
jumps 11%
    ** Major developers Country Garden  2007.HK  rises 8.6%,
Longfor Group  0960.HK  gains 15%, and state-owned Yuexiu
Property  0123.HK  climbs 10%
    ** UBS says several tier-2 cities have recently announced
stimulus for the property market and expectations are increasing
that other cities will follow suit in coming days
    ** "Given the very weak property market in China, we have
heard more and more voices from local experts calling for
regulators' more support of property markets," brokerage
CGS-CIMB says in a note
    ** Potential measures could include lower downpayment
requirements, relaxation of home purchase restrictions and other
monetary loosening, it adds 
    ** According to the private researcher CRIC, contract sales
volume at the top 100 developers posted a 21.2% yearly drop in
May, compared to 10.7% growth in April
    ** The broader Hang Seng Index  .HSI  is up 4.1%
    ** Property services firms also jump, with Country Garden
Services  6098.HK  Sunac Services  1516.HK  surging 13% and 14%,
respectively

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