Chinese property developers rally on expectation of more monetary easing

 

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Shares of Chinese property developers are rallying in Hong Kong, with KWG Group surging nearly 13%, Logan Group up 9%, Powerlong up 7%, Country Garden and Agile Group up more than 4%.

The PBOC cut the interest rate on 7-day reverse repo by 10 basis points, increasing market expectation that the central bank will cut another policy rate, the rate on one-year Medium-Term Lending Facility (MLF) on Thursday, which is expected to bring down the benchmark lending rate LPR later this month.

CITIC Securities said that given that Chinese banks including the country’s six largest state-owned banks have lowered the interest rates on deposits which lowered cost and the current economic situation, there is a big chance for a rate cut for MLF.