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Developers lead mainland shares down on liquidity concern
By Ye Zhen |
August 2, 2012, Thursday
|
Online Edition
Online Edition
SHANGHAI stocks ended lower today, dragged down by property developers, on rumor the government may abolish the presale system of commercial property.
The key Shanghai Composite Index lost 0.57 percent to settle at 2,111.18 points and turnover was 41.8 billion yuan (US$6.6 billion).
Rumor was spreading through the market today said the government may introduce a pilot project in Beijing to cancel the presale system of commercial residential houses.
The presale system allows developers to sell residential houses before the completion of construction, which offers developers a way to alleviate the shortage of capital and reduce the investment risk.
The cancellation will put developers with high debt ratios and weak financing capacities in danger of liquidity crunch, said Wang Jianhui at Capital Securities.
Poly Real Estate led the loss of developers, slumping 9.2 percent to end at 10.30 yuan. China Vanke, the nation's biggest developer, dropped 6.8 percent to 8.70 yuan. Gemdale Corporation dived 6.4 percent to 5.43 yuan.
Cement producers posted a weak run. Anhui Conch Cement Co, the biggest Chinese cement producer, shed 0.8 percent to close at 14.82 yuan. Zhejiang Jianfeng Group Co, a company operates in building materials, primarily cement industry, shrank 2.5 percent to 10.33 yuan. Gansu Qilianshan Cement Group Co edged down 0.8 percent to 10.71 yuan.
Non-ferrous metal producers also fell. Inner Mongolia Baotou Steel Rare-earth (Group) Hi-tech Co, a producer of rare earth materials, lost 1.3 percent to finish at 36.74 yuan. Zijin Mining Group Co, the nation's largest gold producer, dropped 1.1 percent to 3.66 yuan. Jiangxi Copper, China's biggest producer of the metal, fell 1.4 percent to 20.10 yuan.
The key Shanghai Composite Index lost 0.57 percent to settle at 2,111.18 points and turnover was 41.8 billion yuan (US$6.6 billion).
Rumor was spreading through the market today said the government may introduce a pilot project in Beijing to cancel the presale system of commercial residential houses.
The presale system allows developers to sell residential houses before the completion of construction, which offers developers a way to alleviate the shortage of capital and reduce the investment risk.
The cancellation will put developers with high debt ratios and weak financing capacities in danger of liquidity crunch, said Wang Jianhui at Capital Securities.
Poly Real Estate led the loss of developers, slumping 9.2 percent to end at 10.30 yuan. China Vanke, the nation's biggest developer, dropped 6.8 percent to 8.70 yuan. Gemdale Corporation dived 6.4 percent to 5.43 yuan.
Cement producers posted a weak run. Anhui Conch Cement Co, the biggest Chinese cement producer, shed 0.8 percent to close at 14.82 yuan. Zhejiang Jianfeng Group Co, a company operates in building materials, primarily cement industry, shrank 2.5 percent to 10.33 yuan. Gansu Qilianshan Cement Group Co edged down 0.8 percent to 10.71 yuan.
Non-ferrous metal producers also fell. Inner Mongolia Baotou Steel Rare-earth (Group) Hi-tech Co, a producer of rare earth materials, lost 1.3 percent to finish at 36.74 yuan. Zijin Mining Group Co, the nation's largest gold producer, dropped 1.1 percent to 3.66 yuan. Jiangxi Copper, China's biggest producer of the metal, fell 1.4 percent to 20.10 yuan.
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