PBoC Holds Loan Prime Rates Steady, China and HK Stocks Waver

Li Chen
20 Nov, 2024
Hong Kong

Stock market indexes in China and Hong Kong lacked direction as investors debated the economic growth outlook and geopolitical situation. 

The Hang Seng index inched up a fraction, and the mainland-focused CSI 300 index advanced 0.3%. 

The People's Bank of China left its loan prime rates unchanged after lowering rates in the previous month. 

The central bank held steady one-year loan prime rate at 3.1% and 5-year loan prime rate at 3.6%; both rates are used as reference rates for consumer and corporate loans. 

Stock market indexes have been under pressure for the last six weeks after fiscal and monetary reforms failed to impress investors. 

Moreover, corporate results in the latest earnings season have also shown growth of less than 1%, knocking down the expectations laid out by many international brokerage houses. 

Stock market indexes in China and Hong Kong are likely to face more selling pressure in the coming weeks, as valuations do not reflect earnings and economic growth realities. 

Moreover, the Chinese economy is in long-term economic decline, and annual growth rates are expected to ease to as low as 3% over the next three years. 

Policymakers in Beijing have announced a slew of measures to revive the faltering property market, including a lower transaction tax, relaxing rules for first-time home buyers, and offering cheaper mortgage loans. 

However, those measures have failed to provide support to developers to complete unfinished residential projects and bolster the financial strength of property companies. 

Chinese manufacturing companies are also bracing for higher tariffs from the U.S. as the new administration works to impose tariffs of as much as 60%.

 

China Stock Movers 

The Hang Seng index increased 0.05% to 19,674.23, and the CSI 300 index added 0.3% to 3,987.53. 

Alibaba Group decreased 1.5% to HK $84.05, Tencent Holdings advanced 0.7% to HK $409.40, and JD.com decreased 0.07% to HK $137.10. 

Baidu.com added 0.7% to HK $83.70 ahead of the company's quarterly financial results later today. 

Xiaomi Corp. declined 2.5% to HK $27.55 and extended two-day losses to more than 5% despite the company lifting its annual electric vehicle delivery outlook a few days ago. 

Hunan Xiangtou Goldsky Titanium Metal Co. Ltd. soared more than 310% to 29.32 yuan on the first day of trading after the company listed its stock on the Shanghai stock exchange. 

Hunan Xiangtou Goldsky Titanium priced its offering at 7.16 per share and raised 662 million yuan.