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Market plummets on property policy
By Feng Jianmin and Ding Yining |
July 13, 2010, Tuesday
|
Online Edition
Online Edition
SHANGHAI stocks posted the biggest daily drop in two weeks today after the government pledged to carry on tightening measures on the property market.
The benchmark Shanghai Composite Index dropped 1.62 percent, or 40.43 points, to close at 2,450.29 points. Turnover was 63.4 billion yuan (US$9.3 billion).
The Shenzhen Composite Index, which covers the smaller mainland exchange, lowered 1.39 percent to 979.77 points.
Ministry of Housing and Urban-Rural Development, China Banking Regulatory Commission and State-owned Assets Supervision and Administration Commission respectively responded to the market rumor that restrictions on property speculation may ease.
Measures will be taken to reinforce restricted loans on second and third homes, to boost supply of homes for consumption, and to reduce state-owned companies' presence in the property business.
"The current strict policies are quick solutions to immediate problems, but they cannot ensure a stable development of the property market in the long run as transactions drop," People's Daily cited vice chairman of the China Real Estate Association Zhu Zhongyi as saying.
"There is little possibility that the index will see a very strong rebound as the economic recovery outlook is not so optimistic and market liquidity is tight," Huarong Securities wrote in a research note.
Banking shares were weak. China Construction Bank lost 1.65 percent to 4.76 yuan. Bank of China was down 1.68 percent to 3.51 yuan. Shanghai Pudong Development Bank dropped 1.80 percent 14.17 yuan.
Gemdale Real Estate Corp sank 4.01 percent to 6.47 yuan. China Vanke went down 2.36 percent to 7.46 yuan. Poly Real Estate (Group) Co slid 4.31 percent to 11.33 yuan. China Merchants Property Development Co retreated 3.98 percent to 16.41 yuan.
Gold miners were also among the losers on lower bullion prices. Zijin Mining Group Co shed 3.68 percent to 5.76 yuan after the company reported leakage of polluted water to Ting River in Fujian Province, which may affect copper production at its Zijinshan mine. Shandong Gold Mining Co withdrew 2.93 percent to 33.15 yuan. Zhongjin Gold Co tumbled 4.44 percent to 26.24 yuan.
The benchmark Shanghai Composite Index dropped 1.62 percent, or 40.43 points, to close at 2,450.29 points. Turnover was 63.4 billion yuan (US$9.3 billion).
The Shenzhen Composite Index, which covers the smaller mainland exchange, lowered 1.39 percent to 979.77 points.
Ministry of Housing and Urban-Rural Development, China Banking Regulatory Commission and State-owned Assets Supervision and Administration Commission respectively responded to the market rumor that restrictions on property speculation may ease.
Measures will be taken to reinforce restricted loans on second and third homes, to boost supply of homes for consumption, and to reduce state-owned companies' presence in the property business.
"The current strict policies are quick solutions to immediate problems, but they cannot ensure a stable development of the property market in the long run as transactions drop," People's Daily cited vice chairman of the China Real Estate Association Zhu Zhongyi as saying.
"There is little possibility that the index will see a very strong rebound as the economic recovery outlook is not so optimistic and market liquidity is tight," Huarong Securities wrote in a research note.
Banking shares were weak. China Construction Bank lost 1.65 percent to 4.76 yuan. Bank of China was down 1.68 percent to 3.51 yuan. Shanghai Pudong Development Bank dropped 1.80 percent 14.17 yuan.
Gemdale Real Estate Corp sank 4.01 percent to 6.47 yuan. China Vanke went down 2.36 percent to 7.46 yuan. Poly Real Estate (Group) Co slid 4.31 percent to 11.33 yuan. China Merchants Property Development Co retreated 3.98 percent to 16.41 yuan.
Gold miners were also among the losers on lower bullion prices. Zijin Mining Group Co shed 3.68 percent to 5.76 yuan after the company reported leakage of polluted water to Ting River in Fujian Province, which may affect copper production at its Zijinshan mine. Shandong Gold Mining Co withdrew 2.93 percent to 33.15 yuan. Zhongjin Gold Co tumbled 4.44 percent to 26.24 yuan.
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