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Shanghai index dips to seven-week low
By Ye Zhen |
November 14, 2012, Wednesday
|
Print Edition
Print Edition
SHANGHAI stocks fell to the lowest level in nearly seven weeks yesterday, dragged down by property developers after the central government reiterated its firm stance on property market curbs and hinted at expanding a property tax trial to more cities.
The benchmark Shanghai Composite Index lost 1.5 percent to 2,047.89 points, its lowest close since September 26.
The government won't relax current restrictions on home purchases in the short term and is "actively studying" an expansion of the property tax trial, Xinhua news agency reported, citing Jiang Weixin, minister of housing and urban-rural development.
China launched the property tax trial in 2011 in an effort to cool speculation in the housing market. Shanghai and Chongqing are among the first cities to collect tax from individuals who own more than one home.
"The decline among real estate developers was the major force that sent the market down as expectations the government would ease control on the housing sector were shattered by the property tax news," said Song Zhongqing, analyst with Changjiang Securities.
Poly Real Estate, China's second-largest listed developer, declined 1.4 percent to 11.46 yuan (US$1.84). Gemdale Corp fell 3.8 percent to 5.25 yuan.
Brokerages also tumbled on speculation the government will soon cancel the floor price for commissions.
"Without the floor price, some brokerages may lower commissions to attract customers and this may fuel a price war," Nanjing Securities said.
CITIC Securities, the country's biggest listed brokerage, sank 1.6 percent to 10.69 yuan. Haitong Securities Co declined 3.4 percent to 8.44 yuan.
The benchmark Shanghai Composite Index lost 1.5 percent to 2,047.89 points, its lowest close since September 26.
The government won't relax current restrictions on home purchases in the short term and is "actively studying" an expansion of the property tax trial, Xinhua news agency reported, citing Jiang Weixin, minister of housing and urban-rural development.
China launched the property tax trial in 2011 in an effort to cool speculation in the housing market. Shanghai and Chongqing are among the first cities to collect tax from individuals who own more than one home.
"The decline among real estate developers was the major force that sent the market down as expectations the government would ease control on the housing sector were shattered by the property tax news," said Song Zhongqing, analyst with Changjiang Securities.
Poly Real Estate, China's second-largest listed developer, declined 1.4 percent to 11.46 yuan (US$1.84). Gemdale Corp fell 3.8 percent to 5.25 yuan.
Brokerages also tumbled on speculation the government will soon cancel the floor price for commissions.
"Without the floor price, some brokerages may lower commissions to attract customers and this may fuel a price war," Nanjing Securities said.
CITIC Securities, the country's biggest listed brokerage, sank 1.6 percent to 10.69 yuan. Haitong Securities Co declined 3.4 percent to 8.44 yuan.
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