Technical Analysis

More on China looking to ease “three red lines” property – would boost property sector

Headline is here from earlier:

As background,

The three red lines were introduced in August 2020 when Chinese property was rising in price very strongly indeed.

They stated property should adhere to the following rules:

1. Liabilities should not exceed 70% of assets (excluding advance proceeds from projects sold

2. Net debt should not be greater than 100% equity.

3. Money reserves must be at least 100% of short-term debt.

The market response to the news was a higher yuan, AUD and NZD . The pop was relatively minor for AUD and NZD, yuan has carried on a bit more.

Chinese property shares had risen substantially earlier ion the session on earlier news and have not thus seen notable gains on this new item.

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