Hang Seng Indexes Company announced last Friday Shimao Property (813.HK), a major Chinese property group, will be added to the Hang Seng China Enterprises Index with effect from June 8, a move that could attract buying from passive index tracking funds.
Meanwhile, Citigroup expects China to announce additional stimulus measures at its top annual policy meeting on May 22, including infrastructure and urbanization, where Shimao Property is likely to be among the most benefited property developers.
In fact, the company's property sales performance was not largely impacted by the coronavirus, with contracted sales growing 41% on year in April and were up 4.3% in the first four months of the year.
From a technical point of view, Shimao Property (813.HK) maintains bullish momentum after breaking above its January high as shown on the daily chart. It has confirmed an upside break through as it has broken above a bullish flag pattern. The level at $30.50 may be considered as the nearest support, with prices likely to test the 1st and 2nd resistance at $34.80 and $36.90 respectively. Alternatively, losing $30.50 might indicate that the next support at $28.40 may be threatened.
Source: TradingView, Gain Capital
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