Surging property developers take Hang Seng higher as investors cheer Chief Executive Carrie Lam’s ‘housing for all’ pledge

Georgina Lee

The Hang Seng Index closed higher, as property firms led gains after investors cheered housing and land policies announced by the Hong Kong’s embattled Chief Executive in her policy address. The benchmark gauge 0.6 per cent at 26,664.28.

In China, all leading benchmarks ended lower, as investors’ concerns about an economic slowdown resurfaced. The CSI 300 Index, which tracks blue chips listed in Shanghai and Shenzhen, closed down 0.3 per cent at 3,922.69, while the Shanghai Composite Index lost 0.4 per cent to 2,978.71.

In the city’s first televised policy address ever, Chief Executive Carrie Lam Cheng Yuet-ngor unveiled details of the Land Sharing Scheme announced last year. Starting early next year, private developers will be invited to hand part of their farmland to the government in exchange for higher density and quicker development approval.

Hong Kong policy address key takeaways: Lam homes in on housing grievances

Meanwhile, the government is ready to back first-home buyers by raising the lending cap on how much they can borrow.

“There is a positive feeling that the scarce land resources could now unlock their market value faster than before, with policies such as the Land Sharing Scheme which I expect would facilitate more collaboration between the government and developers to quicken up new-house build,” said Kenny Tang Sing-hing, chief executive of Royton Securities.

Tang said while the government’s housing policy appears to be more aggressive than initially expected, the measures’ impact on Hong Kong stocks would be relatively muted, because the state of the housing market also depends on the economy.

Property stocks helped lift the Hang Seng Index higher, with the properties sub-index up 2.7 per cent at 38,675.12.

New World Development was the top gainer, climbing 4 per cent to HK$10.76. Sun Hung Kai Properties moved up 2.9 per cent to HK$115.2, Henderson Land rose 2.8 per cent to HK$38.25 and Link Reit jumped 2.9 per cent to HK$84.35.

In China, concerns about the country’s slowing growth resurfaced after Tuesday news that the producer price index had dropped the most in over three years, sinking to minus 1.2 per cent from a year earlier, following August’s reading of minus 0.8 per cent.

“China’s third-quarter GDP growth will likely slow to 6.1 per cent from a year ago, down from 6.2 per cent in the second quarter,” Betty Wang, senior China economist for ANZ, wrote in a note.

Leading the indices down were liquor stocks, and IT shares.

Kweichow Moutai feels impact of China’s slowing economy

Kweichow Moutai lost 3.4 per cent to 1,170 yuan, after the distillery giant reported lacklustre third quarter results. In Shenzhen, its smaller rivals also dropped, with Wuliangye Yibin down 1.9 per cent at 130.13 yuan.

LONGi Green Energy Tech plunged 8.6 per cent to 24.11 yuan. Foxconn Industrial Internet lost 0.9 per cent to 14.77 yuan, and 360 Security Tech slid 1.5 per cent to 23.68 yuan.

However, sentiment in the Chinese stock market has actually improved. This can be seen from the stronger net inflow from foreign investors through the Hong Kong stock connect, said Kenny Tang Sing-hing, chief executive of Royton Securities.

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