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Property shares were the best performers in the two financial hubs, with gauges tracking the sector rising at least 2% as of 11:20 a.m. local time. China Resources Land Ltd. soared as much as 9.6% and Longfor Group Holdings added 7.9% to be among the top point contributors to the Hang Seng Index.
High-ranking Chinese officials including Vice Premier Liu He and central bank deputy governor Pan Gongsheng said on Wednesday that risks in the property market are controllable and the sector’s financing is becoming normal.
The remarks provided a much-need boost for sentiment for an industry that’s been weighed by falling housing sales, sliding investment and President Xi Jinping’s mention of a property tax in a recent article, on top of months of the nail-biting saga of Evergrande’s liquidity woes.
The regulators’ comments “reaffirmed our view that the ‘darkest hour’ for the sector is over,” Sinolink Securities Co. analysts including Du Haomin wrote in a Wednesday note. Banks’ granting of mortgages and loans for developers are picking up and other policies may improve such as the deferral of developers’ payment of funds for land purchases, they added.
The brokerage recommends Sunac China Holdings Ltd. and Seazen Holdings Co., along with state-controlled Poly Developments and Holdings Group Co. and China Vanke Co.
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