Rare! Collective changes in Hong Kong stocks and A shares
Real estate stocks have suddenly become the object of capital pursuit!
On May 10th, real estate stocks in the A-share and Hong Kong stock markets changed collectively. Shimao Group, a domestic housing stock in Hong Kong stocks, once rose over 90% in intraday trading, and South China City once rose over 70%. The A-share real estate sector rose by nearly 4%, with nearly 10 daily limit shares such as () and (), and Vanke A once rose by nearly 5%. Some analysts pointed out that the stock price of real estate stocks usually reacts faster than the recovery of fundamentals, so the bottom of real estate stocks has been basically clear.
On the same day, financial stocks such as insurance and banks also changed at the same time as real estate stocks. On the same day, the banking and insurance sectors in Hong Kong rose by 4%. The high dividend sectors of Hong Kong stocks such as energy and electricity also strengthened collectively. In addition, a number of Hong Kong stock dividend-related ETFs rose more than 5%. Among them, the Hong Kong stock exchange dividend ETF, the Hong Kong stock exchange non-bank ETF, the Hong Kong stock exchange financial ETF, the Hong Kong stock exchange dividend index ETF and the Hong Kong stock exchange central enterprise dividend ETF all hit new highs in intraday trading. In this regard, China, a brokerage firm, took the lead in reporting this morning: "Hong Kong, the sudden spread of great benefits! 》
So, why is the high dividend sector so strong?
Real estate stocks soared.
Today, real estate stocks are highly sought after. Shimao Group, a Hong Kong stock, once rose more than 90% in the afternoon, hitting a maximum of HK$ 1.16, and accumulated nearly 160% in two days. South China City once rose more than 70% in intraday trading, and Zhengrong Real Estate, China Aoyuan, Fantasia Holdings and Kaisa Group followed suit. At the close, Shimao Group rose 60%, South China City rose nearly 45%, China Aoyuan and Fantasia Holdings rose over 20%, and Kaisa Group rose 14.55%.
In the A-share market, the real estate sector also rose sharply. At the close, the overall increase of the sector was close to 4%, and nearly 10 shares of China Merchants Shekou, (), () and Binjiang Group rose by more than 5%, and Vanke A rose by more than 3.56%.
Some analysts pointed out that the strength of real estate stocks is related to the news that Hangzhou, the core city of the Yangtze River Delta, and Xi ‘an, the core city of the northwest, both announced the cancellation of housing purchase restrictions. The market expects that the regulation policies of first-tier cities will be optimized to the main urban areas, and the pattern of comprehensive cancellation of purchase restrictions in second-tier cities will accelerate. The recent intensive implementation of policies has helped to repair market expectations, and promoted the activity of market transactions, helping sales to gradually stabilize.
On May 9, Hangzhou issued the Notice on Optimizing and Adjusting the Regulation Policy of the Real Estate Market, and Xi ‘an issued the Notice on Further Promoting the Stable and Healthy Development of the Real Estate Market. On the same day, two high-energy cities further optimized and adjusted their real estate policies, including a series of measures such as completely canceling the housing purchase restriction. Prior to this, Chengdu also issued a document on April 28th to optimize the real estate policy.
Huatai Securities pointed out that Chengdu, Hangzhou and Xi ‘an are all cities with good chemical conversion rate since the fourth quarter of 2023, and the optimization of real estate policies in these cities is expected to inject confidence into the market. At present, real estate sales have not completely stabilized and rebounded, and the Politburo meeting has continued due to the city’s policy. It is expected that more first-tier cities and strong second-tier cities will introduce more industry support policies, which is expected to promote market confidence and fundamental repair and provide valuation repair space for the real estate sector.
At present, the market is highly concerned about the fundamental trend after the introduction of the policy, and CITIC Securities believes that by mid-2024, housing prices in the core areas of core cities are expected to stabilize. In addition, () said that a number of core cities have recently introduced policies to relax the purchase restriction, including Beijing’s optimization of the housing purchase restriction policy after 13 years and the addition of a set of housing purchase indicators outside the Fifth Ring Road; Cancel the purchase restriction in Chengdu and Changsha; Tianjin released the purchase restriction of new houses of 120 square meters or more in the six districts of the city; Shenzhen single non-local household registration and two-child household registration families can purchase one suite in some areas. It is expected that under the new policy tone, the pattern of real estate regulation and control policies in first-tier cities will be optimized to the main city and the purchase restriction will be completely cancelled in second-tier cities.
After the adjustment of Politburo meeting of the Chinese Communist Party, a new round of policies has arrived, the policies of core first-and second-tier cities have been continuously optimized, and more supportive policies can be expected. We believe that the current industry fundamentals are already in the bottom range, and the subsequent decline space is limited, and the valuation of the real estate sector is at a historically low level. The response of real estate stocks is usually faster than the recovery of fundamentals, so the bottom of real estate stocks has been basically clear.
Du Haomin and Fang Peng, analysts of Guojin Securities, also believe that after Politburo meeting of the Chinese Communist Party’s adjustment, a new round of policies has arrived, the policies of core first-and second-tier cities have been continuously optimized, and more supportive policies can be expected. At present, the fundamentals of the industry are already in the bottom range, and the space for subsequent decline is limited, and the valuation of the real estate sector is at a historically low level. The response of real estate stocks is usually faster than the recovery of fundamentals, so the bottom of real estate stocks has been basically clear. First push the key layout, deepen the first-tier and core second-tier cities, focus on improving products, and have the ability to continuously acquire land.
The rise of financial stocks
Financial stocks are also one of the highlights today.
In the Hong Kong stock market, as of the close, Hong Kong banks and insurance sectors rose by more than 4%, () by more than 8%, China Construction Bank by nearly 7%, () by more than 6%, China Ping An by 5.77%, Agricultural Bank by more than 5%, () by China CITIC Bank and Bank of Communications by nearly 5%. At the same time, the high dividend sectors of Hong Kong stocks such as energy and electricity also rose sharply, with the energy sector rising by more than 4%, () rising by more than 6% and China Petrochemical Co., Ltd. rising by more than 5%.
Some analysts pointed out that the rise of high dividend assets in Hong Kong stocks such as finance, energy and electricity was mainly influenced by a rumor last night-it was reported that "the dividend tax on Hong Kong stocks may be reduced." However, as of the press release of China reporter, the above news has not been officially confirmed.
() The report released this morning pointed out that if the bonus tax relief for Hong Kong stocks is implemented, it is expected to further boost mainland investors’ investment enthusiasm for Hong Kong stocks, especially those related to high dividends, boost sentiment in the short term and help improve the liquidity of the Hong Kong stock market in the long run.
CICC pointed out that in August last year, a liquidity task force was set up in Hong Kong to pay attention to the follow-up measures to improve liquidity. Looking ahead, if the dividend tax adjustment is implemented, it will become another important measure to potentially improve the liquidity of Hong Kong stocks after the reduction of stamp duty in Hong Kong stocks at the end of last year and the introduction of five measures for cooperation with Hong Kong by the Securities and Futures Commission last month. Next, we will not rule out further measures, which may include reducing transaction costs (reducing transaction commissions) in the short term; Lower the investment threshold and broaden the investment scope in the medium term (appropriately relax the entry threshold of Hong Kong Stock Connect and continuously optimize the listing system); Long-term activation of product innovation (optimization of Hong Kong Growth Enterprise Market mechanism, establishment of professional boards for professional investors, etc.).
Huatai Securities said that the dividend tax not only directly affects the AH premium of listed companies in the two places, but also indirectly affects the investable value of constituent stocks in the scope of Hong Kong Stock Connect to the south. Taking May 8, 2024 as the time parameter, and the stocks within the scope of Hong Kong Stock Connect with a market value of more than HK$ 10 billion and a static dividend yield of more than 5% as the range pool, the sub-sectors with a southbound shareholding ratio of more than 14.9% and a static dividend yield of more than 7% are screened under the holistic method, and the conclusions are as follows: energy, materials, capital goods, automobiles and auto parts and banks. It can be concerned that the investment value of high dividend varieties in related industries may be improved.