Market Updates
New Home Sales In China Rebounded In October, Stock Indexes Pare Weekly Losses
Li Chen
31 Oct, 2024
Hong Kong
Stock market indexes in China and Hong Kong advanced and pared weekly losses in the hopes that the property market may be on a path to early recovery.
The Hang Seng index gained 1.5%, the mainland-focused CSI 300 index added 0.9%, and they increased 0.2% and declined 0.7% in the week, respectively.
New home sales at 22 leading home developers across mainland China soared 66% from the previous month in October and advanced 2% from a year ago, according to China Real Estate Information Corp.
New home sales rose for the first time this month after the People's Bank of China announced a raft of monetary measures and local governments eased restrictions on purchases.
The October sales added to optimism that the property market may be stabilizing after four years of decline and contribute to an economic recovery.
China's leading property developers have been mired in speculative residential projects funded by huge debts from local banks, shoddy construction practices, and unfinished homes that have been fully paid in advance by customers.
The widespread mismanagement and cozy relationship between local politicians, banks, and property developers have saddled millions of property buyers with mortgages and unfinished homes.
The current monetary and expected fiscal measures are not likely to have a lasting impact on the residential market, as consumers have little faith in property developers and local governments.
Investors took an optimistic view of the latest update on manufacturing activities, and the Caixin China General Manufacturing PMI showed a rebound in the sector.
The index increased at the fastest pace in four months in October to 50.3 from 49.3 in the previous month, after a series of stimulus measures from Beijing in late September.
On Thursday, the official data showed that the manufacturing sector returned to growth after contracting for five months in a row.
China Stock Movers
The Hang Seng index increased 1.5% to 20,620.22 and the mainland-focused CSI 300 index rose 0.9% to 3,924.96.
China Overseas Land and Investment increased 5.9% to HK $15.74, China Resources Land Ltd. added 5.6% to HK $27.30, and China Vanke Co. increased 1% to HK $27.30.
Tencent Holdings increased 4.2% to HK $421.40, Alibaba Group added 1.1% to HK $95.65, and JD.com Inc. increased 3% to HK $160.10.
Li Auto decreased 7.1% to HK $99.80 after the electric vehicle maker reported better-than-expected quarterly results, but weaker-than-expected fourth quarter sales guidance dragged the stock down.
The company reported strong third-quarter sales and guided higher sales in the fourth quarter, but the forecast fell short of market expectations.
Revenue in the third quarter increased 23% to 42.9 billion yuan; gross margin contracted to 21.5% from 22% from a year ago and from 19.5% in the second quarter.
Adjusted earnings per share in the quarter were 3.63 yuan, or 52 cents.
Vehicle delivery in the third quarter soared 45.4% to 152,000, and the company estimated between 160,000 and 170,000 vehicles in the fourth quarter.
The company guided revenue between 43.2 billion yuan and 45.9 billion yuan (between $6.2 billion and $6.5 billion).
T.S. Lines traded at HK$4.0 after falling as much as 5% in its first day of trading in Hong Kong.
The shipping company priced 250.9 million shares at HK $4.18 per share and raised HK $940.9 million.
The company has set the price range for its initial public offering between HK $3.50 and HK $4.50 per share.
The 225.8 million-share international offering was oversubscribed 2.2 times, and the 25.1 million-share domestic offering was oversubscribed 12 times.
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