Property developers push up key index
By Feng Jianmin |
May 19, 2011, Thursday
|
Print Edition
Print Edition
SHANGHAI'S key stock index yesterday rose for the second straight day, as real estate developers gained after data showed new home prices climbed in most Chinese cities last month.
The Shanghai Composite Index rose 0.7 percent, or 20 points, to close at 2,872.77, the highest since May 11.
"The market is struggling between expectations for fewer tightening measures to support economic growth and concerns over inflation," said Chen Ruiming, senior strategist with Haitong Securities. "Companies with small caps may outperform blue chips after half a year's price correction."
He said the index is unlikely to drop below 2,750 points in the second quarter, where the market valuation would equal the lowest level in 2010.
Property developers rose after China's statistics bureau said new home prices in April rose in 56 of the 70 major cities from March. Poly Real Estate Group Co, China's second-biggest listed property developer, was up 1.3 percent to 10.31 yuan. Gemdale Corp, the fourth largest, added 0.3 percent to 6.41 yuan.
"The property sector is a good choice for investment in the next three months," said Zheng Mingang, of Dong Xing Securities. "More people will buy homes because only a few local governments are expecting a price fall."
Coal miners extended previous gains on speculation that prices will continue to rally after the China Electricity Council said the current shortage of electricity is likely to worsen. Yanzhou Coal Mining Co grew 0.9 percent to 32.99 yuan. Shanxi Guoyang New Energy Co jumped 2.9 percent to 24.46 yuan.
The Shanghai Composite Index rose 0.7 percent, or 20 points, to close at 2,872.77, the highest since May 11.
"The market is struggling between expectations for fewer tightening measures to support economic growth and concerns over inflation," said Chen Ruiming, senior strategist with Haitong Securities. "Companies with small caps may outperform blue chips after half a year's price correction."
He said the index is unlikely to drop below 2,750 points in the second quarter, where the market valuation would equal the lowest level in 2010.
Property developers rose after China's statistics bureau said new home prices in April rose in 56 of the 70 major cities from March. Poly Real Estate Group Co, China's second-biggest listed property developer, was up 1.3 percent to 10.31 yuan. Gemdale Corp, the fourth largest, added 0.3 percent to 6.41 yuan.
"The property sector is a good choice for investment in the next three months," said Zheng Mingang, of Dong Xing Securities. "More people will buy homes because only a few local governments are expecting a price fall."
Coal miners extended previous gains on speculation that prices will continue to rally after the China Electricity Council said the current shortage of electricity is likely to worsen. Yanzhou Coal Mining Co grew 0.9 percent to 32.99 yuan. Shanxi Guoyang New Energy Co jumped 2.9 percent to 24.46 yuan.
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