Developers Rise on Speculation of Easing Policy: Shanghai Mover

Chinese developer shares rose the most in a month after a statement by the securities regulator prompted speculation that the government may ease curbs on fundraising by real estate companies.

An index tracking property developers listed in Shanghai rose 3.1 percent, the biggest one-day gain since July 11. China’s benchmark Shanghai Composite Index (SHCOMP) gained 2.4 percent.

The China Securities Regulatory Commission issued a statement after the close of markets on Aug. 9 elaborating on conditions for allowing financing by developers, prompting analyst including Zheshang Securities Co.’s Dai Feng and Mizuho Securities Asia Ltd.’s Alan Jin to say regulators were moving toward easing restrictions. The Financial News newspaper, controlled by China’s central bank, published an article today that said the nation may adjust property financing policies.

“The ability to sell shares again will be big good news for the property sector in the second half of the year as it will lower borrowing costs,” said Tian Shixin, an analyst at BOC International China Ltd. in Shanghai. “Investors are expecting the easing to come out soon.”

A three-year campaign by Chinese authorities to rein in home prices has included higher down-payment requirements and bans on purchases of second homes in some cities. Regulators haven’t allowed developers to raise money by selling shares in China since 2010, according to Zheshang Securities’s Dai.

The Shanghai Stock Exchange Property Index has surged more than 8.8 percent since the Communist Party’s Politburo said July 30 that China sought “stable and healthy” development of the real estate market. That statement, for the first time this year, omitted any mention of further tightening, according to Credit Suisse Group AG and Orient Finance Holdings (H.K.) Ltd.

Share Sales

Announcements this month by developers including China Merchants Property Development Co. (000024) and Sundy Land Investment Co. (600077) of plans to sell shares further prompted speculation that limits on financing would be eased.

China Vanke Co. (000002), the nation’s biggest domestically listed developer, rose 3.9 percent to 10.13 yuan in Shenzhen, the biggest gain in almost three weeks. In Hong Kong, China Overseas Land & Investment Ltd. (688), the biggest state-owned developer, rose 1.7 percent to the highest level since May 10.

To contact Bloomberg News staff for this story: Bonnie Cao in Shanghai at bcao4@bloomberg.net

To contact the editor responsible for this story: Iain McDonald at imcdonald7@bloomberg.net

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