Hong Kong Chief Executive Carrie Lam Cheng Yuet-Ngor's policy address this week had a positive effect on the city's housing stocks, sending the Hang Seng Index higher. Investors cheered the embattled chief's announced housing and land policies, particularly her "housing-for-all" pledge to citizens.
On the back of increased housing stock prices, the Hang Seng Index rose by around 0.6 percent to 26,664.28. Hang Seng's properties sub-index increased by more than 2.7 percent during the day's trading, closing at 38,675.12.
The top gainer for the trading day was New World Development. The company saw it's stock prices climb by 5 percent to HK$10.86 during the day.
The developer was then followed by Sun Hung Kai Properties, which gained by 4.5 percent to $116.9. Some of the other big movers for the day included Henderson Land, with a 3.9 percent gain to HK$38.65, and Link Reit, with a 2.9 percent gain to HK$84.35.
The slight increase was partly thanks to Hong Kong's first televised policy address, where a number of measures to address the country's housing crisis were announced.
Part of the measures will be a proposal that will be given to private developers starting next year. Under the Land Sharing Scheme, developers will be invited by the government to donate part of their land in exchange for quicker development and higher density approvals.
Lam also mentioned that the government will be bolstering its efforts to support first-time home buyers. One of the ways it will achieve this is by raising lending caps on the amounts first-time homebuyers will be able to borrow.
Analysts have mentioned that Lam's address has had a positive effect in Hong Kong and most are now more confident that the government can unlock the values of the city's scarce land resources. The various measures, which are aimed at bolstering collaboration between the government and private developers, should also help in providing more houses for residents.
Hong Kong's rollout of new policies to address the housing crisis is apparently much more aggressive than initially expected. Markets have stated that the policies should have very little impact on stocks, given that most are more dependent on the economy as opposed to government policies.
The gains in Hong Kong following Lam's address were unfortunately not mirrored in the mainland. Mainland China's leading benchmarks ended lower during the day, mainly fueled by renewed concerns of an economic slowdown. The Shanghai Composite Index ended with a 0.4 percent drop to 2,978.71, while the CSI 300 Index closed with a 0.3 percent drop to 3,922.69.
