The combination of relaxation of some of the coronavirus control measures in China, such as reducing the quarantine time for close contacts of cases and for travelers arriving in the country by two days, and lifting sanctions on airlines that bring infected passengers, along with the News of a real estate rescue package has caused shares in Chinese developers to soar.
First, the new rules were among the 20 measures discussed at the first meeting of the ruling Communist Party’s new top leadership body on Thursday, amid new momentum to optimize and improve COVID control policies. Meanwhile, Beijing today reported the highest number of local Covid cases in over a year, reporting 404 new local Covid cases for Sunday.
Nevertheless, Friday’s news on sweeping directives to rescue China’s real estate sectorin the strongest signal yet that President Xi Jinping is turning his attention to shoring up the world’s second-largest economy, sent markets higher at the open.
Bloomberg reported on Friday that financial regulators issued a 16-point plan to boost the housing market, with measures ranging from resolving the liquidity crisis for developers to relaxing down payment requirements for home buyersaccording to people familiar with the matter.
The move coincided with a publicly announced 20-point playbook by the National Health Commission, aimed at reducing the economic and social impact of containing Covid.
Consequently, Hong Kong shares rose 593 points, or 3.4%, to trade at 17,912 on Monday, near their six-week highs., extending the strong gains of the previous week. All sectors contributed to the recovery, with strong gains from Country Garden Holdings (+34.4%), Longfor Group (+24.7%), Country Garden Services (+22.1%) and China Merchants (+9.3%).
Meanwhile, US President Joe Biden and Chinese President Xi Jinping meet today in Bali for the first time since Biden became president, on the sidelines of the G20 conference.
Source: Fx Street
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