Index rises as property developers enjoy gains
By Ye Zhen |
July 7, 2012, Saturday
|
Print Edition
Print Edition
SHANGHAI'S stock market yesterday rose by the most in a week after China's central bank cut the benchmark interest rates for the second time in a month to shore up economic growth.
The Shanghai Composite Index gained 1.01 percent to close at 2,223.58 points. The index edged down 0.1 percent this week, capping a third week of losses.
"The central bank's second cut was very timely. It will effectively reduce companies' financial costs and help stabilize the economy, the real estate industry and the stock market," said Li Daxiao, director of the Yingda Securities Research Institute.
Property developers surged amid expectations that the overall net profit of listed developers will increase by 1.36 percent due to the cut, according to Northeast Securities.
Poly Real Estate, China's second-largest listed developer, soared 5 percent to 12.82 yuan (US$2.01). Gemdale Corp added 5.3 percent to 6.91 yuan.
"The rate cuts will reduce home purchase costs for buyers on one hand and bring down developers' financial costs on the other, which is favorable for the recovery of the housing market," the brokerage said in a report.
The Shanghai Composite Index gained 1.01 percent to close at 2,223.58 points. The index edged down 0.1 percent this week, capping a third week of losses.
"The central bank's second cut was very timely. It will effectively reduce companies' financial costs and help stabilize the economy, the real estate industry and the stock market," said Li Daxiao, director of the Yingda Securities Research Institute.
Property developers surged amid expectations that the overall net profit of listed developers will increase by 1.36 percent due to the cut, according to Northeast Securities.
Poly Real Estate, China's second-largest listed developer, soared 5 percent to 12.82 yuan (US$2.01). Gemdale Corp added 5.3 percent to 6.91 yuan.
"The rate cuts will reduce home purchase costs for buyers on one hand and bring down developers' financial costs on the other, which is favorable for the recovery of the housing market," the brokerage said in a report.
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