Hong Kong's benchmark stock index advanced to a one-month high, led by gains among banks and property developers, as investors cheered a policy address by the city's chief executive, expecting it to put a floor on the ongoing real estate slump.
The Hang Seng Index rose 184.21, or by 0.7 per cent to, to 26,848.49, while the China Enterprises Index that tracks the performance of Chinese stocks advanced by 56 points, or by 0.5 per cent, to 10,588.17.
A raft of incentives and measures unveiled yesterday by Hong Kong's Chief Executive Carrie Lam Cheng Yuet-ngor, aimed at alleviating the city's pressing housing issues and promote broader home ownership, was well-received by investors.
The government-backed Hong Kong Mortgage Corporation (HKMC) raised the lending cap on the loan ceiling of mortgage financing schemes for first-home buyers by a third to HK$8 million, from the previous HK$6 million. The higher allowance applies to borrowers who are allowed to borrow up to 90 per cent of the value of the flat.
"The positive impact from these measures would translate to higher property transactions in both new [abodes] and second-hand homes, as owners may upgrade their flats with better mortgage terms now made available by the government," said Alvin Cheung, associate director at Prudential Brokerage.
New World Development, which donated 3 million square feet of farmland to the government and to charity for building public housing, rose by the most among developers in percentage terms. The stock rose 3.9 per cent to HK$11.18.
Henderson Land Development, founded by Hong Kong's second-wealthiest man Lee Shau-kee, advanced 1.3 per cent to a six-week high of HK$38.75. CK Asset Holdings, the flagship company of the city's richest man Li Ka-shing, rose 0.3 per cent to HK$53.80. Sun Hung Kai Properties (SHKP), the city's largest developer by capitalisation, rose 0.8 per cent to HK$116.10.
The gains among property stocks added an estimated US$3 billion to the combined fortunes of Hong Kong's six wealthiest property tycoons, according to Bloomberg.
Shares of Midland Holdings, the city's sole publicly traded real property agent, jumped 20.4 per cent to a two-month high of HK$1.36.
"With these new measures, property values could rise again," said Cheung. "With the wider lending cap, potential buyers would rush back to the market on fear of rising property values."
Hong Kong's financial services stocks rose, after nine of the city's largest banks pledged their support to a plan by the monetary authority to cut borrowers some slack in their loan applications. HSBC, the largest lender and one of Hong Kong's three currency issuing banks, rose 1.3 per cent to HK$60.9 while Bank of East Asia rose 0.3 per cent to HK$18.52. AIA Group, the biggest insurer in the city, rose 0.9 per cent to HK$75.75.
Green Future Food Hydrocolloid Marine Science, a producer of seaweed based food and products including agar, jumped 16 per cent in its trading debut in Hong Kong to HK$1.35, compared with its initial public offering price of HK$1.16.
China's stock market ended on a cautious note, as investors await the announcement of third-quarter economic data tomorrow, expected to show the world's second-biggest economy expanding at 6.1 per cent.
The CSI 300 Index, which tracks the 300 largest stocks on both the exchanges of Shanghai and Shenzhen, was little changed at 3,925.22. The Shanghai Composite Index was also little changed, at 2,977.33.
Kweichow Moutai, the world's largest liquor distiller and China's sole trillion-yuan stock, rose 1.1 per cent to 1,183.33 yuan, after Citic Securities raised its price target by 17 per cent to 1,400 yuan for the next six to 12 month.
Property developer Guangzhou Yuetai plunged 9.9 per cent to 2.91 yuan. SAIC Motor, which makes cars in Shanghai with General Motors and Volkswagen, fell 1.5 per cent to 23.81 yuan on concern of a year-long sales slump in the world's largest vehicle market. Foshan Haitian Flavouring dipped 1.4 per cent to 108.42 yuan.
The Shenzhen Composite Index, which tracks companies in southern China's technology hub, rose by 0.27 point to 1,635.92. Mindray Bio-Medical Electronics advanced 4.2 per cent in Shenzhen to 179.28 yuan while Goertek rose 4.9 per cent to 19.1 yuan.
Traders were also awaiting more details on the phase one partial trade deal reached by US and Chinese presidents last week. US Treasury Secretary Steven Mnuchin said on Wednesday that Trump's "objective" was for an agreement to be signed during the Apec summit in Santiago on November 16 and 17.
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2019 South China Morning Post Publishers Ltd. All rights reserved.
Copyright (c) 2019. South China Morning Post Publishers Ltd. All rights reserved.