China A50

China A50: Today Chinese indices will resume trading after a five-day hiatus known as Golden Week. While Chinese markets were shut, the Chinese govt made some major announcements which influenced Chinese shares listed in Hong Kong (H-shares). To recap: Last week, the most important news was Tuesday’s property easing. The gist is to increase mortgage availability for various kinds of home buyers. It is significant because it was announced at the central government level, while the previous eases of home purchase restrictions (HPR) were all done at local level. Macquarie expects home sales growth to start improving in the fourth quarter of 2014, while prices may bottom after the Chinese New Year. Both National Bureau of Statistics of China and HSBC’s manufacturing PMIs remained flat in Sep, suggesting stabilized, yet still weak, growth momentum. Macquarie expects economic growth to improve modestly in Sep, leaving Aug the trough of the third quarter (3Q) and 3Q the trough of the year. Looking forward, key events in Oct include the 4th plenum (Oct 20 to 23) and the upcoming Stock Connect (late Oct estimated).