Aug. 22 (Bloomberg) -- China Shanshui Cement Group fell in Hong Kong trading, leading other construction companies lower, on concern the Chinese government will further tighten monetary policy, crimping building demand.
Shanshui Cement Group, a Shandong-based cement and clinker producer, dropped 10.9 percent to HK$6.50, the lowest in almost five months. China State Construction International Holdings Ltd. fell 10.4 percent and China National Building Material Co. declined 4.3 percent. The benchmark Hong Kong Hang Seng Index rose 0.5 percent.
Stocks in China fell today, extending losses to a fifth day, as the nation’s money-market rate climbed to its highest level in almost three weeks after the central bank raised yields at bill auctions, fueling speculation of further monetary tightening. Falling cement prices may also indicate that demand for building materials will be weak, Zhu Jixiang, an analyst at Capital Securities, said by telephone today.
“Investors may be concerned about further property tightening measures by the Chinese government as there’s no sign that property prices have been reined in,” Ricky Tam, a Hong Kong-based director at Champlus Asset Management, said by phone.
Prices for new homes gained in July from a year earlier in 68 of 70 cities monitored by the government, the statistics bureau said last week.
The People’s Bank of China lifted yields on its three-month, one-year and three-year bills last week. The one-year yield now exceeds the central bank’s benchmark rate for similar-term deposits, a sign policy rates may be increased, Daiwa Capital Markets Hong Kong Ltd. said in an Aug. 19 report.
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