Chinese stocks fell for the first time in four days after a central bank adviser said real-estate curbs shouldn’t be reversed, with losses for developers overshadowing China Everbright Bank Co.’s rally on its debut.
Poly Real Estate Group Co. and China Vanke Co. slid at least 1 percent after the Financial News cited Xia Bin as saying the nation shouldn’t rush when dealing with the property market. Everbright Bank gained 18 percent on the first day of trading after completing the nation’s second-largest initial public offering this year.
The Shanghai Composite Index, which tracks the bigger of China’s stock exchanges, retreated 5.59, or 0.2 percent, to 2,666.30 at the 3 p.m. close, ending a three-day, 3.7 percent advance. The CSI 300 Index fell 0.1 percent to 2,937.36. The Shanghai gauge has rallied 11 percent this quarter as the slowdown in the economy spurred speculation the government will ease property restrictions and allow more lending.
“The rebound will come to an end as soon as economic data points to further downside,” said Larry Wan, Beijing-based head of investment at Union Life Asset Management Co., which oversees the equivalent of $2.21 billion. “Still the slowdown in the economy will be moderate, preventing any big declines in the stock market.”
An index tracking real-estate companies dropped 0.8 percent. The property gauge has rallied 16 percent this quarter on speculation the slowing economy will prompt the government to ease its tightening policies.
The economy is cooling as the government trims credit growth from last year’s record $1.4 trillion and discourages multiple-home purchases to check surging property prices. Restrictions this year include higher down-payment and mortgage rates for multiple-home buyers and instructions for lenders to halt third-home loans in areas with “excessive” price gains.
Poly Real Estate, China’s second-largest developer by market value, slipped 1 percent to 13.16 yuan, paring its gain since the end of June to 29 percent. Vanke, the biggest, lost 1.7 percent to 8.79 yuan. Gemdale Corp., the fourth largest, fell 2.3 percent to 6.90 yuan.
Xia said China shouldn’t make any short-term changes to its property market measures, the Financial News reported today. The nation should take two years to “solve” real estate issues, it said. The Financial News is published by China’s central bank.
Everbright Bank jumped 18 percent to 3.66 yuan. At 18.9 billion yuan ($2.8 billion), Everbright Bank’s IPO was the second-largest in China in 2010, a year dominated by small deals until Agricultural Bank of China Ltd.’s record $22.1 billion offering in Shanghai and Hong Kong.
“The Chinese IPO market has regained momentum recently,” said Josef Schuster, the Chicago-based founder of IPOX Capital Management LLC, which oversees $3 billion. “We also look at that as an important indicator for global sentiment.”
A gauge of material stocks rose 1.3 percent for the biggest gain in the CSI 300 Index. Yunnan Copper Industry Co., China’s fourth-biggest producer of the metal, added 1.9 percent to 21.19 yuan after saying it returned to profit in the first half of the year.
Automakers gained after the Shanghai Securities News said sixteen enterprises owned by the central government have formed an alliance to develop electric cars. [bn:WBTKR=600104:CH]
SAIC Motor Co. , China’s largest carmaker, surged 4.1 percent to 16.12 yuan. FAW Car Co., which makes passenger cars in China with Volkswagen AG, added 1.9 percent to 17.18 yuan.
Companies based in the country’s northeast jumped after the government said reform in the region would be accelerated.
Heilongjiang Transportation Development Co., a toll-road operator, gained 5.4 percent to 4.48 yuan. Yingkou Port Liability Co. climbed 2.1 percent to 6.85 yuan.
A meeting held by China’s State Council urged the country’s northeastern area, a traditionally heavy-industry production zone, to speed up reform, according to a statement from the meeting chaired by Premier Wen Jiabao posted on the government website yesterday.
China’s capital markets may be on the cusp of a “big bang” as policy makers allow increased access to investors abroad, Nomura Holdings Inc. analysts led by Sean Darby said in a note today.
The People’s Bank of China said yesterday overseas financial institutions will be allowed to invest yuan holdings in the nation’s interbank bond market in a pilot program to spur currency flows from abroad. The currency is also known as the renminbi, or RMB.
Investors opened 253,154 accounts last week, up 7.6 percent from a week earlier, the China Securities Depository and Clearing Corp. said on its website today.