China Indexes Extended Weekly Losses After Housing Secretary Conference Failed to Deliver New Measures

Li Chen
17 Oct, 2024
Hong Kong

Stocks in Hong Kong and mainland China resumed their downward slide after a press briefing from the housing secretary fell short of market expectations. 

Benchmark indexes opened higher but turned lower as the press briefing by the Minister of Housing Rural-Urban Development, Ni Hong, got underway. 

Officials made several key announcements to relax property purchase restrictions, increase financing to local governments, and expedite the purchase of properties on the so-called preferred list of projects. 

The housing minister said between January and September, about 1.5 million residential units were built or allocated, and about 4.5 million people are expected to move in by the year's end. 

Minister Hong added that loans to preferred projects on the so-called white list have reached 2.3 trillion yen, or about $313 billion, with the target of 4 trillion yuan by the end of the year. 

The officials from the central bank, the Ministry of Finance, the National Financial Regulatory Administration, and the housing secretary chaired the widely advertised press conference. 

The government's relaxation of mortgage rates and additional measures to lower down payment requirements will support the demand for new homes but will not ease the financial strain on property developers in the near future. 

The latest press briefing from the housing secretary follows the announcement from the finance minister a week ago, and government officials failed to provide clear fiscal measures to revive consumer confidence. 

Market indexes in Hong Kong and mainland China surged more than 20% in the three-week period but have lost about one-third of the gains after the government officials failed to follow through with specific measures. 

The Hang Seng index has lost more than 6% in the last three days as investors lower expectations of policy reforms to arrest falling property markets and revive consumer confidence. 

 

China Stock Movers 

The Hang Seng index decreased 1.2% to 20,039.69, and the CSI 300 index dropped 0.8% to 3,803.19. 

Residential property developers fell sharply after the housing secretary failed to announce any new measures to ease the financial burden on the companies. 

The announced measures are not expected to improve home buyers's confidence as the property market is likely to remain depressed in the foreseeable future. 

China Vanke plunged 16.6% to HK $6.61, China Resources Land dropped 5.2% to HK $25.20, and Longfor declined 13.5% to HK $11.92. 

Alibaba Group fell 0.8% to HK $98.15, Tencent Holding decreased 1.1% to HK $411.20, and JD.com declined 0.5% to HK $154.70.