China, HK stocks rise after central bank begins swap programme
Investors awaiting details on fiscal stimulus due from finance ministry on Saturday
10 October 2024 - 17:17
by Agency Staff
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Shanghai/Singapore — China and Hong Kong share prices rose on Thursday after the People’s Bank of China (PBOC) kicked off a swap programme aimed at supporting the stock market, while investors await directions from further policy announcements.
China’s blue-chip CSI300 index and the Shanghai composite index both climbed nearly 3% each by midday. Hong Kong’s benchmark Hang Seng index was up 4.2%.
The central bank said it would start accepting applications for its 500-billion-yuan ($70.62bn) swap facility from financial institutions — a move aimed at channelling more cash into the stock market.
“I believe the move provides liquidity to help companies fund trades if needed,” said Lorraine Tan, director of equity research for Asia at Morningstar.
Tan, however, said that whether share prices can sustain the uptick still depends on policy details that can be seen to more effectively address excess housing inventory and boost consumer activity.
Meanwhile, investors await details on fiscal stimulus from a much-awaited finance ministry press conference on Saturday.
Stephen Chang, MD and Asia portfolio manager at PIMCO, said they are closely monitoring for more policy announcements, especially fiscal policy, as additional easing is needed to achieve a sustainable recovery.
“If we see aggressive supporting measures announced in the near term, then it could likely sustain the recent risk-on sentiment towards China,” Chang said.
Despite the gains on Thursday, China’s stock rally was losing momentum this week, and its sovereign bond futures were broadly up.
Chinese stocks tumbled on Wednesday as investors locked in profits after a blistering 10-day rally. The decline also reflected investor disappointment over a lack of more powerful stimulus to revive the economy.
“We firmly expect Beijing to present a fiscal stimulus package,” said Ting Lu, chief China economist at Nomura, referring to a briefing by the ministry of finance due on Saturday.
The size of the overall stimulus package could be capped at 3% of the GDP per year, including funding from the PBOC and policy banks, Lu said.
Consumer staple and energy shares were leading gains in China, up 3.8% and 5.9%, respectively.
Mainland property developers traded in Hong Kong were up 5.5%, after a sharp decline over the past two sessions.
Shares of Guotai Junan and Haitong Securities surged in China and Hong Kong, respectively, after details of the merger were disclosed.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
China, HK stocks rise after central bank begins swap programme
Investors awaiting details on fiscal stimulus due from finance ministry on Saturday
Shanghai/Singapore — China and Hong Kong share prices rose on Thursday after the People’s Bank of China (PBOC) kicked off a swap programme aimed at supporting the stock market, while investors await directions from further policy announcements.
China’s blue-chip CSI300 index and the Shanghai composite index both climbed nearly 3% each by midday. Hong Kong’s benchmark Hang Seng index was up 4.2%.
The central bank said it would start accepting applications for its 500-billion-yuan ($70.62bn) swap facility from financial institutions — a move aimed at channelling more cash into the stock market.
“I believe the move provides liquidity to help companies fund trades if needed,” said Lorraine Tan, director of equity research for Asia at Morningstar.
Tan, however, said that whether share prices can sustain the uptick still depends on policy details that can be seen to more effectively address excess housing inventory and boost consumer activity.
Meanwhile, investors await details on fiscal stimulus from a much-awaited finance ministry press conference on Saturday.
Stephen Chang, MD and Asia portfolio manager at PIMCO, said they are closely monitoring for more policy announcements, especially fiscal policy, as additional easing is needed to achieve a sustainable recovery.
“If we see aggressive supporting measures announced in the near term, then it could likely sustain the recent risk-on sentiment towards China,” Chang said.
Despite the gains on Thursday, China’s stock rally was losing momentum this week, and its sovereign bond futures were broadly up.
Chinese stocks tumbled on Wednesday as investors locked in profits after a blistering 10-day rally. The decline also reflected investor disappointment over a lack of more powerful stimulus to revive the economy.
“We firmly expect Beijing to present a fiscal stimulus package,” said Ting Lu, chief China economist at Nomura, referring to a briefing by the ministry of finance due on Saturday.
The size of the overall stimulus package could be capped at 3% of the GDP per year, including funding from the PBOC and policy banks, Lu said.
Consumer staple and energy shares were leading gains in China, up 3.8% and 5.9%, respectively.
Mainland property developers traded in Hong Kong were up 5.5%, after a sharp decline over the past two sessions.
Shares of Guotai Junan and Haitong Securities surged in China and Hong Kong, respectively, after details of the merger were disclosed.
Reuters
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