Asian equities were lower on light volumes as Indonesia outperformed and Pakistan was closed for a market holiday.
Key News
Asian equities were lower on light volumes as Indonesia outperformed and Pakistan was closed for a market holiday.
Hong Kong’s morning gains faded in the afternoon on light volumes, though growth stocks held up better than most following yesterday’s gains.
Like yesterday, the biggest market news occurred after the close as Guangzhou became the second Tier 1 city to ease home purchase restrictions like Shanghai did yesterday. Yesterday, Shanghai issued nine measures, including lowering the minimum down payment ratio to 20% and the minimum mortgage interest rate of Loan Prime Rate (LPR) minus 45 basis points for first-time home buyers. Shanghai also lowered the minimum down payment ratio to 35% with a minimum mortgage interest rate that is the loan prime rate (LPR) minus 5 basis points for second-time homebuyers. Local banks are implementing the new rates today. Guangzhou lowered the minimum down payment ratio to 15% for first-time home buyers and 25% for second-home buyers.
Yesterday, I theorized that real estate stocks would rally on the news, leading to real estate being the worst performer in Mainland China, where it fell -1.96% and Hong Kong, where it fell -1.12%. Technology also struggled, though semiconductor stocks managed gains following yesterday’s news of the third state-backed semiconductor-focused investment fund, aptly called « Big Fund 3 ». The first semiconductor-focused investment fund was back in 2014.
Hong Kong’s most heavily traded stocks by value were Tencent, which gained +0.74%, Alibaba, which gained +0.38%, Meituan, which gained +0.25%, CNOOC, which gained +0.73%, and Xiaomi, which fell -1.63%. Mainland media is reporting that Tencent’s app store is partnering with Microsoft’s MSFT app store to allow the use of applications on each other’s ecosystems.
