U.S. stocks closed down on Monday (22nd), but stocks in the U.S. and China bucked the trend and rose more than 1%. The bullishness is that Beijing has made continuous moves to save the housing market.People familiar with the matter said that the Chinese government will pay attention to the buildersRMB 200 billion yuan ($29.3 billion) in special loans to promote the handover of “unfinished buildings”.
NasdaqChina’s Golden Dragon Index closed up 1.22 percent at 6,924.49 points on Monday. Vipshop (VIPS-US) shares surged 7.91%, while Pinduoduo (PDD-US) surged 4.74%, while Li Auto (LI-US) also rose more than 3%.In comparison, U.S. stocksS&P 500 IndexA heavy fall of 2.14%.
Bloomberg reports that the Chinese government will pay for the builders, people familiar with the matter saidRMB 200 billion yuan ($29.3 billion) in special loans to promote the handover of “unfinished buildings”. The central bank and the Ministry of Finance will channel funds through policy banks such as the China Development Bank and the Agricultural Development Bank of China, the sources said.
China’s Ministry of Housing and Urban-Rural Development, the Ministry of Finance and the People’s Bank of China announced the loan program on Friday, without revealing the scale or details, in what would be Beijing’s biggest financial aid pledge for the housing crisis.
The Chinese government stated that this special loan focuses on “guaranteeing the delivery of buildings and stabilizing people’s livelihood”, and is strictly limited to construction projects that have been sold, overdue, or difficult to deliver.
The People’s Bank of China made two other moves to save the housing market on Monday. The central bank authorized the National Interbank Funding Center to announce on Monday that the one-year loan market quoted rate (LPR) was 3.65%, compared with 3.7% last month, which was the first time the central bank lowered interest rates since January; the LPR for more than 5 years was 4.3% , the previous month was 4.45%.
Bloomberg economist Zhu Yi believes that China is strengthening monetary support, and the most urgent thing is to support the housing market. The LPR quotation (the reference benchmark for bank mortgage pricing) with a maturity of more than 5 years has fallen even more, highlighting this priority. With China’s credit unexpectedly slowing in July, Zhu Yi expects the central bank to take more steps to keep borrowing costs down.
Meanwhile, Yi Gang, governor of the People’s Bank of China and director of the Office of the State Council’s Financial Commission, chaired a symposium with some financial institutions on Monday, instructing “to safeguard the reasonable financing needs of real estate.”