Shares of iQiyi Inc. (IQ), a leading Chinese streaming and entertainment company, surged by a staggering 16.26% in pre-market trading on September 30, 2024, as optimism surrounding China's new mortgage stimulus measures fueled a broader rally in Chinese stocks.
The rally came on the heels of China's announcement of steps to lower borrowing costs on mortgages for millions of families. Beginning November 1, homeowners will be able to renegotiate terms with their current lenders, and those with fixed mortgage rates can negotiate new loans based on the latest loan prime rate, a reference rate for mortgage loans.
This move, part of a broader stimulus package aimed at reviving the struggling property sector and boosting economic growth, sparked a surge in Chinese stocks listed in the U.S., including iQiyi. Analysts believe that by easing mortgage rules and reducing borrowing costs, the government aims to stimulate consumer spending and support domestic consumption, which could benefit companies like iQiyi that rely heavily on the Chinese market.
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