Chinese Stocks in Hong Kong Jump After More Property Easing

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Chinese stocks listed in Hong Kong advanced on Monday after the nation rolled out further property support measures including lower down payments for homebuyers and looser mortgage rules at major cities.

The Hang Seng China Enterprises Index gained as much as 2.4%, with property names China Resources Land Ltd. and China Overseas Land & Investment Ltd. leading the advance. A Bloomberg Intelligence gauge of developer shares jumped more than 5%. The Hong Kong stock market was closed due to a typhoon on Friday. The CSI 300 Index of shares rose 1% to add to Friday’s gains.

Chinese authorities announced last week the nationwide minimum down payment will be uniformly set at 20% for first-time buyers and 30% for second-time purchasers, in its latest attempt to halt a slide in the country’s residential property market. Mega-cities Beijing and Shanghai later said they would lower mortgage requirements for some homebuyers, following similar steps by Shenzhen and Guangzhou.

Home transactions in China’s biggest cities soared over the weekend following the loosening of mortgage rules last week, according to several local media reports Monday. Over 1,800 units of new homes were sold in Beijing on Saturday alone, compared with just 3,100 units for entire August, the reports said.

Shares of Country Garden Holdings Co. jumped nearly 9%. The distressed builder has wired a coupon payment coming due on a ringgit-denominated bond, according to people familiar with the matter. For the CSI 300, energy and materials sub-indexes led the advance. Beijing has been rolling out new stimulus measures on an almost daily basis over the past two weeks, including the first reduction since 2008 in the stamp duty for stock trades and a cut to existing mortgage rates. While not enough to dispel deeper worries over China’s structural economic slowdown and the property market’s relentless troubles, the measures have nonetheless helped lift sentiment.

 

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