Property Stocks Rebound In Hong Kong Ahead of Expected Fed Rate Cut, Midea Group IPO Sizzles On Debut

Li Chen
17 Sep, 2024
Hong Kong

Stocks in Hong Kong advanced for the fourth day in a row, and property stocks led the gainers. 

The Hang Seng index soared more than 1.5%, and the financial markets in mainland China are set to resume trading on Wednesday after a 4-day weekend. 

Stocks advanced ahead of the possible rate cut by the U.S. Federal Reserve on Wednesday, and investors increased their bets that the central bank is more likely to cut rates by 50 basis points. 

Amid widespread speculation, investors are hoping that the Federal Reserve is expected to signal that the central bank is prepared to lower rates by as much as 100 basis points by the end of 2024. 

Rate cuts in the U.S. also automatically lower interest rates in Hong Kong to maintain the city's currency peg with the U.S. dollar. 

Moreover, the Bank of England is scheduled to hold its rate steady on Thursday, and the Bank of Japan is likely to keep its interest rate range unrevised on Friday. 

Market sentiment in Hong Kong was also boosted by the expectation that the Chinese government will provide additional stimulus following weak economic data over the weekend. 

 

China Stock Movers 

The Hang Seng index added 1.6% to 17,696.54, and financial markets in mainland China were closed for a holiday. 

Midea Group increased 10% to HK $59.30, and the Foshan-based electric appliance and household consumer electronics maker raised HK $31 billion in an offering last week. 

The company priced its Hong Kong initial public offering at HK $54.80 per share and raised $3.98 billion in the largest offering in three years. 

The company is likely to exercise its option to sell additional shares amid strong interest from international investors and increase its offering size to $4.6 billion. 

The company is the largest maker of white goods, and the appliance maker also owns Germany-based industrial robot company Kuka. 

The company's stock in Hong Kong traded at a 20% discount to its closing price in Shenzhen at ¥63.51.

Tech stocks advanced in Hong Kong trading, tracking gains on Wall Street in overnight trading. 

Alibaba Group gained 1.6% to HK $82.95, Tencent Holdings jumped 0.9% to HK $381.20, and Baidu gained 1% to HK $83.50. 

Henderson Land Development increased 3.2% to HK $24.55, Sun Hung Kai Properties gained 2.2% to HK $80.80, and CK Asset Holdings gained 4.4% to HK $32.30.