(Bloomberg) — Chinese stocks jumped after the country rolled out more asset support measures, the latest in an intensified campaign to rescue the economy’s struggling sector.
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The Hang Seng China Enterprises Index gained 3.6 percent, with asset names Longfor Group Holdings Ltd. and China Resources Land Ltd. leading the way. Shares of the developer rose more than 8 percent, according to a Bloomberg Intelligence gauge. While Hong Kong’s stock market was closed due to the storm, the CSI 300 index of offshore Chinese shares rose 1.7 percent.
China is taking big steps to show policy commitment to support certain measures to support the housing market. Recent changes include lowering the minimum down payment and easing mortgage limits for some homebuyers in megacities, including Beijing. Several local media outlets reported on Monday.
JPMorgan Chase & Co., including Carl Chan. “We believe this will lead to a short-term recovery among all Tier-1 cities, as it unlocks some of the previously pent-up demand for reforms. While the pace may slow thereafter, this easing may still calm sentiment, a necessary first step to avoid further deterioration,” analysts said in a note. He said.
In Beijing, more than 1,800 new homes were sold on Saturday alone, more than half of the 3,100 homes sold in August, said Zhang Dawei, an analyst at Centalin Property Agency. Some new housing projects in Shanghai recorded the same number of transactions in one day as they did last month, according to a separate report in The Paper.
After the HSCEI gauge weakened in August as one of the world’s worst-performing indexes, hopes are building that Chinese stocks are poised for a further sustained recovery. Beijing has rolled out new stimulus measures almost every day for the past two weeks, including a reduction in stamp duty on stock trading for the first time since 2008. While not enough to allay deep worries about China’s structural economic slowdown, the measures helped lift sentiment.
“The question now is how sustainable the buyer interest will be and how long it will last,” Zi Weifeng, senior analyst at Loomis Sayles Investments Asia PT, said on Bloomberg TV, citing property metrics. “We don’t give up hope, but don’t give up too early.”
Read: China freezes payments, mortgage rates in stimulus drive
Shares of Domestic Garden Holdings Inc. rose 19 percent. The distressed builder has missed the coupon payment due on the ringgit-denominated bond, people familiar with the matter said. For the CSI 300, the energy and materials sub-indices led the way.
Chinese builders’ dollar bonds rose at least 2 cents on Monday, credit traders said. At 1:24 p.m., Dalian Wanda Group Co.’s 7.25% 2024 note rose 6.3 cents to 68.6 cents on Monday, after gaining 14 cents last week, according to data compiled by Bloomberg.
The HSCEI benchmark lost 8.2% in August, its worst monthly loss since February. Hong Kong’s stock market and schools were closed on Friday as Super Typhoon Saola brought a storm and heavy rain to the territory.
“Given the market’s close on Friday, it’s a reaction to the mortgage rate cut announced last Thursday, which could give consumers disposable income and sentiment,” said Bloomberg Intelligence analyst Marvin Chen.
–With assistance from Jenny Yu, Wei Zhou, Dorothy Ma, Pearl Liu, Yvonne Mann, and Rishad Salamat.
(In the second paragraph, the index name previously written has been corrected.)
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