Market in cash call as developers rebound

Some companies seized the chance to place shares and raise funds ahead of expected US interest rate hikes as the Hong Kong stock market remained directionless.

The Hang Seng Index closed at 23,739 points yesterday, down seven points, ending a three-day uptrend.

Shares of mainland property developers and management service providers rebounded after the Chinese government said it will build 6.5 million low-rental homes for leasing purposes across 40 major cities in the five years through 2025, which will benefit 13 million young people.

Among companies looking to raise cash, Yuexiu Real Estate Investment Trust (0405) is set to raise 1.33 billion yuan (HK$1.63 billion) through a share sale at a 3.3 percent discount to the previous close, while Longfor (0960) also plans to issue 2.8 billion yuan of domestic corporate bonds.

This came as Shimao Group (0813) said it has not entered into a preliminary agreement to sell a plaza in Shanghai but is in discussions with potential purchasers on disposing of certain properties to reduce indebtedness.

Meanwhile, Chinese tech stocks were mixed yesterday as Tencent (0700) rose 1.5 percent and Kuaishou (1024) grew more than 3.3 percent but Alibaba (9988) and Xiaomi (1810) both fell more than 1.5 percent.

Pharmaceutical shares too were mixed as some rose on profit alerts and others fell on share placements.

Wuxi Biologics Cayman (2269) jumped 6 percent, the biggest gainer among blue chips, after the management said its revenue and profit will further grow this year compared to 202.

But CanSino (6185) fell 5.5 percent after news that some of its investors sold 3.15 million shares in the Chinese vaccine maker at a discount compared to the previous close.

Mainland media reported CanSino has filed an application for the emergency use of its newly developed inhaled vaccines.

Automaker stocks also fell, with Li Auto (2015), which dropped 5.3 percent, leading the decline.

Elsewhere, the US's headline CPI was seen climbing to a red-hot 7 percent year-on-year while Federal Reserve chairman Jerome Powell said the central bank will prevent higher inflation from becoming entrenched, while cautioning that the post-pandemic economy might look different to the previous expansion.