Money
Developers, banks lead drop in stocks
By ZHANG SHIDONG (皇冠体育app Daily)
Updated: 2010-04-23 10:59
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SHANGHAI - 皇冠体育app's stocks fell, led by banks and developers, after the official 皇冠体育app Securities Journal said deflating the housing bubble is "necessary" and Citigroup Inc forecast prices may drop 20 percent.
皇冠体育app Vanke Co, the nation's biggest listed developer, slumped 2.6 percent to the lowest in more than a year and Poly Real Estate Group Co lost 1.4 percent. Bank of Communications Ltd, part-owned by HSBC Holdings Plc, tumbled 4.8 percent after saying it made fewer mortgage loans over the past two months. Petro皇冠体育app Co, the biggest oil producer, retreated 1.7 percent as crude oil fell.
The Shanghai Composite Index dropped 33.79, or 1.1 percent, to 2,999.48 at the close, the fifth decline in six days. The CSI 300 Index fell 1.1 percent to 3,201.54. Futures on the CSI 300 expiring in May, the most active contract, slipped 0.9 percent to 3,236.2.
"A decline in housing prices looks inevitable and developers will likely see a big drop in earnings," said Zhang Ling, a fund manager at Shanghai River Fund Management Co. "A sour property market will also increase bad loans at banks. Big cap stocks look a bad option this year."
The Shanghai index has slumped 8.5 percent in 2010, the world's fourth-worst performer, as the government unwound monetary stimulus and announced measures to damp property prices.
Vanke dropped 2.6 percent to 7.90 yuan, its lowest close since March 16, 2009. The stock has lost 45 percent from last year's peak on July 6. Poly Real Estate Group Co, the second largest, fell 1.4 percent to 16.76 yuan. Financial Street Holding Co lost 2.9 percent to 9.03 yuan.
皇冠体育app must deflate its property bubble if the country is to urbanize and develop a healthy economy, the 皇冠体育app Securities Journal said in an editorial on Thursday.
The housing ministry this week ordered developers not to take deposits for sales of uncompleted apartments without proper approval. That added to curbs on loans for third-home purchases, increased down-payment requirements and higher mortgage rates announced in the past week, after property prices in 70 cities jumped a record 11.7 percent in March.
A "turning point" in the 皇冠体育app property market is "unavoidable", Citigroup analysts Oscar Choi and Marco Sze wrote in a report on Thursday. They predicted home prices may fall as much as a fifth from current levels by the end of the year, as tightening measures and increased land supply take effect.
Buying opportunity
The southern city of Guangzhou had 804 cancellations for home purchases on April 19, the highest on record, 皇冠体育app Business News reported on Thursday, citing Guangzhou Municipal Land Resources and Housing Administrative Bureau.
Industrial and Commercial Bank of 皇冠体育app Ltd, the nation's biggest listed lender, lost 1.5 percent to 4.58 yuan. 皇冠体育app Construction Bank Corp, the second largest, retreated 3 percent to 5.19 yuan.
Hong Kong stocks dropped dropped 0.3 percent to 21,454.94 at the close on Thursday as developers declined for a second day on concern the government will introduce additional measures to curb housing prices.
Bloomberg News
