RIYADH: China stocks rose on Monday after the governor of the country’s central bank vowed to increase the implementation of prudent monetary policy to support the real economy.
Financials and property developers’ shares led the gains, as regulators stepped up efforts to encourage lenders to extend loans to qualified real estate projects. This followed a widening mortgage-payment boycott on unfinished houses.
The CSI300 index rose 1.2 percent to 4,297.55 at the end of the morning session, while the Shanghai Composite Index gained 1.5 percent to 3,276.17.
The Hang Seng index added 2.6 percent to 20,820.87 points. The Hong Kong China Enterprises Index gained 2.9 percent, to 7,162.31.
China steps up loan-support efforts to developers amid mortgage boycott
Chinese regulators stepped up efforts to encourage lenders to extend loans to qualified real estate projects as the beleaguered property sector faced fresh risks from a widening mortgage-payment boycott on unfinished houses.
The China Banking and Insurance Regulatory Commission told the official industry newspaper on Sunday that banks should meet developers’ financing needs where reasonable.
The CBIRC expressed confidence that with concerted efforts, “all the difficulties and problems will be properly solved,” the China Banking and Insurance News reported.
The remarks come as a growing number of home buyers across China threatened to stop making their mortgage payments for stalled property projects, aggravating a real estate crisis that has already hit the economy.
Stellantis terminates China GAC joint venture in U-turn
Stellantis has announced the “orderly termination” of its loss-making joint venture with Chinese carmaker GAC, which has been producing Jeep vehicles, only four months after saying it would raise its stake in the business.
The U-turn comes after GAC reprimanded the world’s fourth largest carmaker in January for announcing plans to raise its stake to 75 percent from 50 percent, stating the two parties had not yet signed a formal agreement.
“We came to the conclusion that it was better to close the joint venture,” a Stellantis spokesperson said, adding that the venture had been loss-making and that the carmaker could still operate in China through its dealer network.
Stellantis will recognize a non-cash impairment charge of approximately 297 million euros ($299.5 million) for its first half 2022 results, said the carmaker.
“The Jeep brand will continue to strengthen its product offering in China with an enhanced electrified line-up of imported vehicles meant to exceed Chinese customer expectations,” Stellantis added.
(With input from Reuters)