China Indexes Stage Mild Rebound Amid Stimulus Details Hopes

Li Chen
18 Dec, 2024
Hong Kong

Stock market indexes in China and Hong Kong advanced after China's state asset supervisory authority issued new guidelines. 

The Hang Seng index gained 0.6%, and the mainland-focused CSI 300 index increased 0.5% as investors held out for more details on fiscal stimulus measures. 

The State-Owned Asset Supervision and Administration Commission issued broad guidelines encouraging state-owned companies to unlock the market value of listed units. 

The vague and general guidelines encourage companies to buy back stocks, provide better disclosures, and consider mergers and acquisitions. 

Beijing policymakers are looking for ways to improve investor confidence as the finance ministry prepares to launch long-term bonds as early as January. 

China Securities Depository and Clearing, the provider of electronic depository and clearing services for Shanghai and Shenzhen stock exchanges, announced its plans to lower fees charged for dividend payout to 0.05% from 0.1%. 

CSDC also said it will cap the dividend payout fees to 1.5 million yuan, or about $206,000, effective January 1. 

Foreign portfolio investors in China and Hong Kong are reluctant to increase their holdings after Chinese policymakers failed to follow through with concrete details for the previously announced fiscal stimulus. 

Moreover, China's annual economic growth is expected to slow to just under 3% by 2026, as the world's second-largest economy struggles with elevated government debt, falling foreign direct investment, and persistent weakness in the residential real estate market. 

Moreover, Chinese companies are expanding their operations overseas to avoid a growing backlash with the European Union and the U.S. and invest in operations in Hungary, Mexico, Vietnam, Thailand, and Malaysia. 

 

China Stock Movers 

The Hang Seng index increased 0.6% to 19,815.30, and the mainland-focused CSI 300 index advanced 0.5% to 3,942.24. 

State-owned Chinese companies traded higher after the release of new guidelines from the SASAC. 

China Unicom gained 0.7% to HK $7.18, PetroChina advanced 1.4% to HK $5.85, CNOOC inched higher 1.5% to HK $18.38, and China Life Insurance increased 1.6% to HK $14.76. 

Li Auto advanced 3.5% to HK $88.55, BYD jumped 1.4% to HK $269.40, Geely Automobile Holdings gained 3.1% to HK $15.52, and Xiaomi Corp. advanced 2.2% to HK $30.60.

Meituan gained 0.9% to HK $160.10, Tencent Holdings edged higher 0.6% to HK $404.60, and Alibaba Group Holding Ltd. inched up 0.4% to HK $83.70.