China plays perilous game of pump the stock market
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
By Hudson Lockett
HONG KONG, Sept 30 (Reuters Breakingviews) -Beijing has reset the narrative - for now. The government's most recent measures to try to bolster the housing and consumer markets have sparked a rally in the country's biggest and most liquid listings, onshore and offshore.The CSI 300 Index .CSI300 of Shanghai- and Shenzhen-listed stocks surged more than 8% on Monday to clock a 27% jump from its low in mid-September. The risk is that when policymakers flesh out their plans, they will leave investors disappointed.
The latest measures announced range from major cities undoing home-purchase restrictions, to the central bank letting borrowers renegotiate mortgages, to the government trying to jump-start consumer spending.
Markets are pricing in gains that suggest officials will be successful. The rally in China’s biggest and most liquid listings has been outstripped by that of consumer stocks, which have in turn been outdone by rising prices for shares in developers: the MSCI China Real Estate index jumped by about a third over the course of last week.
Some of those gains simply reflect the low starting point for Chinese shares. Prior to the recent slew of announcements, Kweichow Moutai's 600519.SS stock had fallen by roughly a quarter in 2024 despite decent results and a share buyback plan of up to 6 billion yuan ($856 million). The world’s biggest spirits maker is now up almost 8% this year.
Hong Kong-listed Country Garden Services 6098.HK, meanwhile, has risen almost 60% from its recent low on Sept. 16; that's far more speculative, as the property management company's eponymous former parent about a year ago missed a bond payment that helped precipitate a near-total reversal of foreign inflows to Chinese stocks by the end of 2023.
It's difficult to track whether foreign funds are now diving back in because Beijing ended daily readouts of the relevant data in August. After so many false starts, global investors remain reticent, with analysts at Morgan Stanley describing further expected gains as a “tactical rally”.
It could be that hope for yet more stimulus is driving stocks up. It is also possible that government-backed buyers have entered the fray, snapping up shares to boost sentiment ahead of the days-long National Day holiday this week during which mainland markets are closed.
The real test will come when Beijing releases the details for the various support measures it has announced. That will reveal whether investors have called the market right - or whether they're due yet another reality check.
Follow @KangHexin on X
CONTEXT NEWS
China’s CSI 300 Index jumped more than 8% on Sept. 30. It has now risen more than 27% from a low touched on Sept. 13, with consumer stocks following property developers higher amid a growing raft of support measures from the central government. The latest increases follow a rally since Sept. 23 that is the biggest weekly gain since 2008.
The megacities of Shanghai, Shenzhen and Guangzhou on Aug. 29 removed restrictions on homebuyer eligibility while the People’s Bank of China announced homeowners will be able to renegotiate mortgage terms with lenders from Nov. 1.
Graphic: Property and consumer sectors drive China stock rally https://reut.rs/4etHFFB
Editing by Antony Currie and Aditya Srivastav
면책조항: XM Group 회사는 체결 전용 서비스와 온라인 거래 플랫폼에 대한 접근을 제공하여, 개인이 웹사이트에서 또는 웹사이트를 통해 이용 가능한 콘텐츠를 보거나 사용할 수 있도록 허용합니다. 이에 대해 변경하거나 확장할 의도는 없습니다. 이러한 접근 및 사용에는 다음 사항이 항상 적용됩니다: (i) 이용 약관, (ii) 위험 경고, (iii) 완전 면책조항. 따라서, 이러한 콘텐츠는 일반적인 정보에 불과합니다. 특히, 온라인 거래 플랫폼의 콘텐츠는 금융 시장에서의 거래에 대한 권유나 제안이 아닙니다. 금융 시장에서의 거래는 자본에 상당한 위험을 수반합니다.
온라인 거래 플랫폼에 공개된 모든 자료는 교육/정보 목적으로만 제공되며, 금융, 투자세 또는 거래 조언 및 권고, 거래 가격 기록, 금융 상품 또는 원치 않는 금융 프로모션의 거래 제안 또는 권유를 포함하지 않으며, 포함해서도 안됩니다.
이 웹사이트에 포함된 모든 의견, 뉴스, 리서치, 분석, 가격, 기타 정보 또는 제3자 사이트에 대한 링크와 같이 XM이 준비하는 콘텐츠 뿐만 아니라, 제3자 콘텐츠는 일반 시장 논평으로서 "현재" 기준으로 제공되며, 투자 조언으로 여겨지지 않습니다. 모든 콘텐츠가 투자 리서치로 해석되는 경우, 투자 리서치의 독립성을 촉진하기 위해 고안된 법적 요건에 따라 콘텐츠가 의도되지 않았으며, 준비되지 않았다는 점을 인지하고 동의해야 합니다. 따라서, 관련 법률 및 규정에 따른 마케팅 커뮤니케이션이라고 간주됩니다. 여기에서 접근할 수 있는 앞서 언급한 정보에 대한 비독립 투자 리서치 및 위험 경고 알림을 읽고, 이해하시기 바랍니다.
