Hong Kong Property Shares Continue to Rally After Policymakers' Comments

   By Anniek Bao 
 

Shares of Hong Kong-listed developers continued to rally on Thursday after positive comments from top Chinese policymakers.

Leading the pack, Sunac China Holdings Ltd. surged as much as 57% and was last 48% higher at 5.80 Hong Kong dollars (74 U.S. cents). Country Garden Holdings Co. was last 22% higher at HK$5.29 after rising as much as 29% in the morning.

Even shares of developers which had been heavily sold last year on worries over their liquidity and ability to meet debt obligations gained ground with Shimao Group Holdings and Kaisa Group Holdings Ltd. rising 25% and 21%, respectively. China Evergrande Group was up 22%.

Some of these developers, including real-estate giant Evergrande, had been hit by Beijing's curbs on borrowing and falling home sales. They plummeted to historic lows as many have been unable to secure new funding.

Chinese state media Xinhua on Wednesday reported that China's state council had pledged to resolve financial risks and stabilize expectations for the property sector, and this was followed by a series of supportive comments from the country's top financial regulators.

Xinhua reported that the State Council had said that it would "study and compose effective risk mitigation solutions in a timely manner, and support developers' transformation into new development models." China's Finance Ministry said it would delay the wider rollout of property tax trials.

Analysts at CGS-CIMB, a brokerage, suggested regulators would announce measures to support the property market in near future, which might reduce their risks of defaulting on debt.

Citgroup said in a research note that it viewed these statements as positive but marginal fine-tuning of policies recently were not game-changers. "We believe broad-based easing with flooding liquidity for property is nearly impossible, and the best to expect for now is targeted downside protection for a few names through coordination with local government and financial institutions," it said.

The benchmark Hang Seng Properties Index was 7.2% higher at 28955.94 and has pared its year-to-date loss to 2.1%.

Write to Anniek Bao at anniek.bao@wsj.com

(END) Dow Jones Newswires

March 17, 2022 01:06 ET (05:06 GMT)

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