China Property Price Decline Accelerated to Nine-Year High; Retail Sales Rebounded In July

Li Chen
15 Aug, 2024
Hong Kong

Stocks in Shanghai and Hong Kong advanced following a mixed batch of key economic data. 

The Hang Seng index gained 0.4% and the CSI 300 index advanced more than 1% after China's statistical agency released retail sales, industrial output, and home price data for July on Thursday. 

Retail sales rebounded to an increase of 2.7% from a year ago, after falling to a 2% increase in June from 3.7% in May, the National Bureau of Statistics reported. 

 

China Retail Sales Growth Expanded 18th Consecutive Month 

Retail sales rose for the 18th month in a row, driven by a rising demand for beverages, sports and recreational goods, and communication equipment. 

On a monthly basis, retail sales rebounded to 0.4% in July from a downwardly revised 0.1% decline in June. 

Retail sales have been under pressure after rising between 7% and 20% a year between 2001 and 20219, as consumer confidence continues to decline following the protracted property market collapse. 

Industrial output edged slightly lower to 5.1% in July from 5.3% in June, the statistical agency reported in a separate report on Thursday. 

 

China New Home Price Dropped at Fastest Pace In Nine Years

New home prices in 70 of the largest cities declined 4.9% from a year ago in July, extending the decline to the 13th month in a row, the statistical agency said in a note on Thursday. 

The prices declined at the fastest pace since June 2015, and the property market rout spread from the second-tier cities to the top-tier cities. 

The decline in home prices accelerated in Beijing to 3.3% from 2.4% in the previous month, in Shenzhen to 8.0% from 7.3%, in Guangzhou to 9.9% from 9.3%, and in Chongqing to 4.9% from 3.4%. 

Shanghai recorded a price increase of 4.4%, matching the rate of increase in the previous month. 

Monthly home prices eased for the third month in a row (0.7% in July), and the decrease was the largest since October 2014. 

The residential property market is likely to remain depressed for the rest of the decade, amid falling demand, a lack of policy support for new construction, weak financial positions of property developers, and shifting demographic patterns. 

 

China Stock Movers 

The Hang Seng index increased 0.4% to 17,171.01, and the CSI 300 index advanced 1.1% to 3,347.40. 

Samsonite SA dropped 12.8% to HK $18.52, and the travel goods maker plans a second listing in the U.S., expands its investor base, and improves stock liquidity. 

Samsonite stock has fallen about 25% in the year so far and plunged nearly 40% from its peak in March. 

CK Infrastructure Holdings declined 0.8% to HK $55.90 after the largest infrastructure company based in Hong Kong received approval for a secondary stock listing in London. 

Last week, a consortium led by the company's energy unit agreed to acquire a portfolio of 32 wind farms located in England, Scotland, and Wales from insurer Aviva for £350 million. 

The company also reported a 2% increase in its earnings in the first half, driven by higher sales in its UK-based portfolio of properties. 

UK-based infrastructure assets accounted for the largest earnings driver for the company and generated 36% of the company's earnings. 

 

Tencent Holdings Net Income Jumped 79% In Second Quarter

Tencent Holdings declined 0.8% to HK $370.80, despite the diversified Internet platform company reporting a 79% increase in profit in its latest quarter. 

Revenue in the second quarter increased 8% to 161.1 billion yuan, or $22.6 billion; profit jumped 79% to 48.4 billion yuan, or $6.8 billion; and free cash flow soared to 40.4 billion yuan, or $5.7 billion. 

In the second quarter, diluted earnings per share increased to 4.99 yuan from 2.69 yuan in the period a year ago. 

During the second quarter, the company repurchased approximately 103.7 million shares on the Hong Kong Stock Exchange for approximately HK$ 37.5 billion and paid HK$ 31.7 billion for the final dividend in respect of the year ended December 2023.