Chinese Developers Jump After Beijing Signals Support for Property Sector
By Bingyan Wang
Shares of Chinese developers jumped early Tuesday after China's top leadership pledged more policy support and adjustments to property policy, hinting at easing measures targeted at the struggling property sector.
Property developers' shares advanced in both the Hong Kong and mainland markets. The Hang Seng Mainland Properties Index rose 10%, outperforming the benchmark Hang Seng Index, which was up 2.8%.
Country Garden Holdings climbed 11% and Longfor Group Holdings advanced 19% in Hong Kong. China Vanke added 5.7% and Poly Developments & Holdings Group jumped 7.6% in mainland trading.
China's Politburo, the country's top decision-making body, held a meeting Monday acknowledging that the economy faces new challenges such as weak domestic demand, some struggling enterprises, risks in several key areas and a complicated external environment.
The meeting came after data showed China's economic growth slowed to 0.8% in the second quarter compared with the prior quarter.
Home sales and home prices have fallen in recent months after a brief uptick at the beginning of 2023, another challenge facing the world's second-largest economy.
Officials also said Beijing will adjust property policies promptly as supply-demand dynamics have changed, hinting at easing measures to rescue the struggling property sector, which accounts for one-third of China's economy by some estimates.
In 13 major cities including Shanghai, Beijing and Hangzhou, the number of listings for existing homes rose 25% in May from last December, with listings surging 82% in Shanghai and 72% in Wuhan, according to data collected by E-house China Research and Development Institution.
"The supportive stance has marginally exceeded our conservative expectation" with top-level acknowledgment on substantial changes in property demand and supply dynamics, Citi analysts said in a note.
However, some analysts believe it will take time and more efforts to shore up the sector. "There is no quick fix for the property sector," said Nomura economist Lu Ting. He doesn't expect Beijing to introduce a mass stimulus program like in previous cycles to stimulate the housing sector.
Write to Bingyan Wang at bingyan.wang@wsj.com
(END) Dow Jones Newswires
July 24, 2023 22:47 ET (02:47 GMT)
Copyright (c) 2023 Dow Jones & Company, Inc.-
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