© Reuters. FILE PHOTO: Workers work at a construction site, following the coronavirus disease (COVID-19) outbreak, in Shanghai, China, October 14, 2022. REUTERS/Aly Song
HONG KONG (Reuters) -Chinese property stocks soared on Monday as the market cheered an aggressive plan outlined by Chinese regulators to shore up liquidity in the embattled sector, with the sub-index surging close to a two-month high in early trading.
The Mainland Properties Index gained 15%, while top property developers Country Garden soared 33%, narrowing gains after rallying as much as 52% to the highest since July 27.
Longfor Group, Agile Group, R&F Properties, Logan Group and KWG Group all jumped almost 30%.
Two sources told Reuters a notice to financial institutions from the People’s Bank of China (PBOC) and the China Banking and Insurance Regulatory Commission (CBIRC) outlined 16 steps to support the industry, including loan repayment extensions, in a major push to ease a deep liquidity crunch that has plagued the property sector since mid-2020.
“We view the PBOC & CBIRC policy could be a game-changer for being the first comprehensive supportive policy from central authorities, unlike previous piecemeal steps,” Citi said in a note on Monday, describing the package as “soaking rain after a long draught”.