Hong Kong Property Stocks Break Losing Streak Amid Lowered Rates

Lowered Lending Rates Sends Hong Kong Shares Up, Led By Property Stocks

Following the announcement that Hong Kong’s three currency-issuing banks

would be cutting their best lending rates, stocks in the city immediately surged.
The increase in major stocks on Thursday managed to break the two-day losing
streak, with the increase being led by banking and property stocks.

Stock prices of the currency-issuing banks rose on Thursday following news of

their rate cuts in response to the Hong Kong Monetary Authority (HKMA) and the
US Federal Reserve’s rate easements. HSBC saw its stocks rise by 0.5 percent to
HK$9.50, while Standard Chartered saw its shares rise by 0.9 percent to
HK$71.90.

The prospect of lowered lending rates pushed property stocks up in the city. Hong
Kong’s largest builder of commercial buildings and shopping centers, Hang Lung
Properties, saw its shares rise by 0.5 percent to HK$19.66. Meanwhile, Hong
Kong’s largest listed developer by value, Sun Hung Kai Properties, saw its shares
rise by 2 percent to HK$118.90.

Eight other property stocks were close to hitting the Hong Kong Stock Exchange’s
10 percent upside limit. The stocks that moved the most during the day included
real estate developer Xinhu Zhongbaol.

Other stocks that made the most movements during the day include Ping An
Insurance, which saw a 0.2 percent gain, and Jiangsu Hengrui Medicine, which
saw a 0.8 percent gain. ACC Technologies saw its stock prices increase by 3.5
percent.

According to market analysts, the recent rate cuts will greatly help the city’s
market, with the property sector getting the most benefit. In conjunction with the
government’s easement of mortgage requirements, the property market is
expected to greatly improve in the coming months.

Hong Kong’s economy also desperately needs the boost as it officially slipped into
a technical recession. The city’s economic growth shrank by 3.2 percent in the
third quarter, mainly due to the effects of the protracted trade dispute between
China and the United States as well as the recent domestic unrest.

Due to the recent developments in the city, Hong Kong also saw a significant 34.2
percent decline in tourist arrivals for the month of September. According to
government data, tourist arrivals from the mainland had declined by 35 percent
during the same month.

Analysts have revealed that most investors had already expected poor
performance and growth in the third quarter. Supporting factors, such as
manufacturing activity and the US’ GDP growth, all pointed to reduced rates,
which means that investors were not at all surprised at how things have turned
out.