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PMI and hopes of easing home curbs pull up index
By Hu Xiaocen |
February 23, 2012, Thursday
|
Print Edition
Print Edition
SHANGHAI stocks yesterday rose for a fourth day as the HSBC Flash Purchasing Manager Index for February improved from January, and also on a news report that harsh property measures will ease although officials later denied the news.
The Shanghai Composite Index added 0.93 percent to end at 2,403.56, the highest level since November 29.
HSBC and Markit Economics said yesterday the preliminary reading of the PMI stood at 49.7 in February. Although it was an improvement from January's 48.8 it was still below 50, which reflects an industrial contraction, observers said.
Qu Hongbin, chief economist for China at HSBC, said: "An economic slowdown is not eased by the rising PMI. I don't see a substantial rebound in domestic demand in the near future. And the weaker external demand is piling downside risks to growth."
Investors were cheered by a Shanghai Securities News report yesterday saying that Shanghai has taken measures to relax curbs on house purchases. Long-term residence permit holders who have lived in the city for more than three years are allowed to buy a second home, the newspaper reported.
The report prompted Bloomberg News to say the relaxation may boost the city's home sales by 20-30 percent.
But Li Bo, analyst at GF Securities, disagreed with Bloomberg's estimation. "It's only a local event. Housing prices will continue to drop till 2013 at a very slow pace, and sales will also be moderate."
The Shanghai Housing Authority denied the news when it said: "There's no relaxation or changes to the existing policies."
Poly Real Estate, China's second-biggest listed developer, rose 2.7 percent to 11.28 yuan (US$1.79). Gemdale Corp gained 3.9 percent to 5.65 yuan.
The Shanghai Composite Index added 0.93 percent to end at 2,403.56, the highest level since November 29.
HSBC and Markit Economics said yesterday the preliminary reading of the PMI stood at 49.7 in February. Although it was an improvement from January's 48.8 it was still below 50, which reflects an industrial contraction, observers said.
Qu Hongbin, chief economist for China at HSBC, said: "An economic slowdown is not eased by the rising PMI. I don't see a substantial rebound in domestic demand in the near future. And the weaker external demand is piling downside risks to growth."
Investors were cheered by a Shanghai Securities News report yesterday saying that Shanghai has taken measures to relax curbs on house purchases. Long-term residence permit holders who have lived in the city for more than three years are allowed to buy a second home, the newspaper reported.
The report prompted Bloomberg News to say the relaxation may boost the city's home sales by 20-30 percent.
But Li Bo, analyst at GF Securities, disagreed with Bloomberg's estimation. "It's only a local event. Housing prices will continue to drop till 2013 at a very slow pace, and sales will also be moderate."
The Shanghai Housing Authority denied the news when it said: "There's no relaxation or changes to the existing policies."
Poly Real Estate, China's second-biggest listed developer, rose 2.7 percent to 11.28 yuan (US$1.79). Gemdale Corp gained 3.9 percent to 5.65 yuan.
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