China Stocks Advanced Ahead of Exports Data, China's Property Sales Remain Depressed

Li Chen
06 Jun, 2024
Hong Kong

Stocks in Shanghai and Hong Kong advanced, and the yuan remained under pressure for the second consecutive week.

Benchmark indexes advanced ahead of the release of international trade data on Friday, and economists are estimating export growth to accelerate above 5% in May. 

Market sentiment was also bolstered after Country Garden reported rising residential property unit sales in May, following the increase reported by China Vanke. 

Policymakers are hoping that recent supportive measures announced by local authorities and the People's Bank of China may encourage more property transactions. 

Despite the cautious optimism, markets are worried that the long-term economic growth trajectory is on the decline, which is likely to negatively impact corporate earnings growth. 

The National Bureau of Statistics is set to announce international trade data on Friday, and economists are looking for exports to jump by as much as 5% amid rising global demand for electric vehicles and industrial machinery. 

Investors are also awaiting the release of import growth, which generally signals the health of domestic demand. 

 

China Stock Movers 

The CSI 300 index increased 0.4% to 3,610.63, and the Hang Seng index advanced 0.5% to 18,508.73. 

Country Garden decreased 3.1% to $5.62 despite the residential property developer reporting rising sales in May, according to filings with the Hong Kong Stock Exchange. 

Contracted sales in May increased by 11.4% to 440,000 square meters from 430,000 square meters in April. 

Sales increased to 4.29 billion yuan, or $592 million, from 3.85 billion yuan in April. 

Despite the recent pick-up in activities, sales declined 76% from a year ago after dropping 83% in April, indicating the government measures are not working as fast as anticipated and the incipient recovery is still limited to tier-1 cities. 

Nationwide residential property sales by the top 100 Chinese developers increased 3.4% from the previous month in May to 322.4 billion yuan, still down about 34% from a year ago, according to the data released by the China Real Estate Information Corporation.