Chinese property stocks fell after June data damped market expectations of a loosening in the government’s real estate curbs and a media report saying a third Chinese city may introduce property-tax trials.
The gauge tracking Shanghai-listed developers was 0.1 percent lower at the close of trading, the only decline among the five sub-industry groups of the benchmark Shanghai Composite Index. Beijing Capital Development Co. (600376) fell 1 percent and Gemdale Corp. (600383) dropped 1 percent.
China’s home sales jumped 24 percent in June from the previous month, the biggest monthly gain this year, data from the National Bureau of Statistics showed yesterday. Hangzhou, in the country’s east, may become the third city after Shanghai and Chongqing to start property-tax trials, the China Securities newspaper reported yesterday, without saying where it got the information.
“Property data were fairly good yesterday, indicating there’s no need to loosen the restrictions,” Luo Yu, a Shanghai-based analyst at advisory CEBM Group, said, citing speculation that policy makers may relax the curbs to avoid aggravating an economic slowdown. “The market is correcting from the previous policy expectations” that fueled a rebound in property stocks.
The property gauge has rallied 5.2 percent since June 28, when 21st Century Business Herald reported that companies with property-related businesses may be able to apply to raise funds and restructure without spinning off those businesses, sparking speculation that refinancing limits for developers may be eased.
China’s economy slowed for a second quarter, adding to risks that the government will miss its expansion target as Premier Li Keqiang reins in a credit boom.
China may increase the number of trial cities for the property tax, Fan Cheuk Wan, head of research for the Asia-Pacific region, private banking and wealth management at Credit Suisse Group AG, said at a briefing in Hong Kong today. The levy is not expected to have a big impact on the property market in the second half, Fan said.
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