Related News
City index falls 1.75% over credit tightening talks
Online Edition
SHANGHAI stocks tumbled to a two-week low today as property developers and building materials producers took a hit from speculations about a credit crunch in the real estate sector.
The benchmark Shanghai Composite Index fell 1.75 percent, or 37.01 points, to 2,076.69. Daily turnover was 107.2 billion yuan (US$17.6 billion).
Worries about a credit squeeze in China’s real estate sector arose after an internal document of Industrial Bank Co Ltd leaked out over the weekend, indicating the lender has suspended some types of loans to the sector spanning from steel and cement suppliers to construction companies.
A report in today’s Shanghai Securities News confirmed that the bank has ordered its staff to suspend mezzanine financing and supply-chain financing to real estate-related clients until the end of March. Another lender, Bank of Communications, denied it had issued a similar order, according to a report on Sina.com.
“Concerns about credit tightening in the property sector depressed investor sentiment and added to uncertainty in the A-share market in the short term,” Ping An Securities Ltd said in a note today.
Investors fear that credit tightening may further sap China’s real estate sector already depressed by years of austerity measures to rein in runaway home prices and post threat to the world’s second largest economy.
“A decline in real estate investment as a result of loan cut will increase downward risk for an economy that has shown signs of weakening,” said the brokerage.
“There is also worry that a sudden decline in real-estate credit may trigger capital chain disruptions in related sectors,” Ping An Securities added.
Property developers slumped. Poly Real Estate, China’s second-largest homebuilder, plunged 8.5 percent to 6.77 yuan. Gree Real Estate Co Ltd fell by the daily limit of 10 percent to 8.88 yuan. Shanghai Industrial Development Co Ltd also plunged the maximum 10 percent to 7.25 yuan.
Cement producers retreated as well. Anhui Conch Cement Co Ltd dropped 5 percent to 14.91 yuan. Huaxin Cement Co Ltd slid 5.9 percent to 10.32 yuan.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
