Infrastructure Shares Eyed on Xi Spending Vow: Evergrande Update
2022.04.27 08:16
© Bloomberg. Visitors walk through a shopping mall in Shanghai, China, on Friday, Feb. 27, 2022. China’s Politburo vowed to strengthen macroeconomic policies to stabilize the economy this year, suggesting more support could be on the cards to boost growth ahead of a key leadership meeting later this year. Photographer: Qilai Shen/Bloomberg
(Bloomberg) — Shares of China’s infrastructure firms may be active after President Xi Jinping pledged to step up construction to bolster the economy, a move that could also benefit the real estate sector.
The central financial committee decided Tuesday to enhance and advance projects in some areas, state broadcaster CCTV reported. The plan will include airports and other transportation hubs as well as energy and water conservancy projects. The committee also urged increased fiscal spending and a broadening of long-term financing channels for the construction.
Among stocks in focus are infrastructure stocks like China Communications Construction Co. and airport shares such as Shanghai International Airport Co.
Key Developments:
- Xi Turns to Construction Spending as Lockdowns Hit China Economy
- HSBC Warns of China Headwinds, More Real Estate Loan Losses
- World-Beating Gain for China Bonds Shows Power of PBOC Policy
China Property Liquidity Malaise Persists on Curbed Refinancing: BI (8:05 a.m. HK)
Chinese developers’ liquidity crunch may not ease until access to fundraising reopens, as repaying debt with cash on hand could only be a transient solution, Bloomberg Intelligence analysts Kristy Hung and Lisa Zhou wrote.
Country Garden Holdings Co. and China Vanke Co.’s weak cash coverage and Sino-Ocean Group Holdings Ltd.’s cash slump may fan investors’ concerns, implying that the industry rebound will be a long slog, they said in a report.
Watch China Infrastructure Stocks on Construction Spending Boost (8:00 a.m. HK)
Shares of China’s infrastructure firms may be active after President Xi pledged to step up construction to support an economy that’s been hammered by a widening series of Covid-related lockdowns.
The central financial committee decided Tuesday to enhance and advance projects in some areas, state broadcaster CCTV reported. The plan will include airports and other transportation hubs as well as energy and water conservancy projects.
Earlier in the day, the People’s Bank of China sought to reassure markets with a broad pledge to step up support through targeted financing for small businesses and a quick resolution of a crackdown on technology firms. China’s leaders are also under mounting pressure as they gather for a critical meeting of the Communist Party’s Politburo — its top decision-making body — in the coming days.
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