{Market Preview}Needs to observe China property market

  The Hang Seng Index closed at 18,069 points in the morning session, down 3 points or less than 0.1%. The main board turnover exceeded HKD 48 billion. The Hang Seng China Enterprises Index (HSCEI) was reported at 6,465, up less than 1 point. The Hang Seng Tech Index (HSTECH) reported 3,665, up 10 points or 0.3%.
  The three most actively traded stocks on the HSI were Tencent (00700), AIA (01299), and Meituan (03690). Tencent closed at HKD 379.8, down HKD 2.2 or 0.6%, with a turnover of HKD 2.057 billion. AIA closed at HKD 54.65, down HKD 0.35 or 0.6%, with a turnover of HKD 1.112 billion. Meituan closed at HKD 116.1, down HKD 0.7 or 0.6%, with a turnover of HKD 986 million. The three most actively traded stocks on the HSCEI were Tencent, Meituan, and Alibaba (09988). Alibaba closed at HKD 72.9, up HKD 0.25 or 0.3%, with a turnover of HKD 965 million. The three most actively traded stocks on the HSTECH were Tencent, Meituan, and Alibaba.

"Lee Wai Kit: HSI trading range is between 17,800 and 18,500"

  The HSI opened lower by 138 points this morning but quickly rebounded and surpassed the 18,000-point level, turning the decline into an increase. Lee Wai Kit, a director of the brokerage department at Huasheng Securities, told ET Net News Agency that the recent narrow fluctuations and small ups and downs in the HSI are normal. As the anniversary of Hong Kong Special Administrative Region Establishment Day on 1 July approaches, the market is watching whether the central government will provide any significant policy announcements, such as implementing the rumoured cancellation of dividend withholding tax on H-shares for Mainland China investors or expanding the Hong Kong stock market connection. If these policies are implemented, it is expected to have a certain positive impact on the Hong Kong stock market, considering the discount of H-shares compared to A-shares.
  Additionally, the market is also awaiting the Third Plenary Session scheduled for next month to see if the central government will introduce new policies to support the property market and boost retail sales. Therefore, it is difficult to expect a breakthrough in the short term for the overall market. Of course, external factors such as the timing and pace of interest rate cuts by the US Federal Reserve, as well as the trends of US stocks, especially in the technology and AI sectors, also affect the performance of Hong Kong stocks. Lee Wai Kit predicts that the HSI will maintain a trading range between 17,800 and 18,500 in the short term.

"Weak may transaction data in Mainland China property market"

  According to the Chinese media outlet "EEO", the Ministry of Natural Resources in China is studying how to activate and utilize policies regarding undeveloped land that has been sold, supporting local governments in reclaiming and acquiring idle land. In terms of "land reclamation," the Ministry of Natural Resources has set criteria: if the idle land or partially undeveloped land is not due to the company's own reasons and the company is unable to continue development or transfer the land, the local government should reclaim the idle land with compensation; if the land has been inactive for more than two years due to the company's reasons, the government should reclaim it without compensation.
  Lee Wai Kit stated that it is currently uncertain how these measures will be implemented in Mainland China. However, the availability of idle land in first-tier cities is limited, so the impact is not significant, while second and third-tier cities face more pressure. The central government has already introduced several policies in April and May to stabilize the property market and ensure the delivery of completed homes. Mainland China property developers are also cooperating with these policies while addressing their own debt issues and seeking a sustainable development path. When asked about the high-priced land sales in Qingdao and Nanjing last week, whether it indicated a recovery in the Mainland China property market, Lee Wai Kit pointed out that the overall data for the Mainland China property market is still weak, and the good prices achieved in individual cities or prime locations cannot be taken as indicators of the overall market.
  He suggested that if investors want to buy Mainland China property stocks, it is relatively safer to consider state-owned enterprises such as China Overseas (00688) and China Res Land (01109). However, the sales figures for both companies declined month-on-month in May. China Overseas recorded sales of RMB 19.7 billion in May, compared to RMB 21.7 billion in April. China Res Land recorded sales of RMB 20.7 billion in May, compared to RMB 21.3 billion in April. Therefore, it is advisable for investors to wait for the June sales data to be released before making a decision (the sales data for China Overseas and China Res Land will be announced in early July and mid-July, respectively).