July 31 (Bloomberg) -- Chinese developers’ stocks rose the most in a week after the government’s ruling Politburo endorsed the development of the property market.
The Shanghai Stock Exchange Property Index advanced 2.1 percent at the close of trading, the biggest gain among five industry groups on the benchmark Shanghai Composite Index. China Vanke Co., the biggest listed developer on mainland exchanges, climbed 2.8 percent to 9.52 yuan in Shenzhen. Poly Real Estate Group Co., the second largest, added 3.2 percent to 10.19 yuan.
China will seek “stable and healthy” development of the property market, the government said on its website after a meeting led by President Xi Jinping yesterday. It is the first time this year that the government didn’t mention further tightening of the property market, according to Credit Suisse Group AG and Orient Finance Holdings (H.K.) Ltd.
“Investors have been watching the direction of the government policy after the new leadership came to power,” Jack Gong, a Hong Kong-based property analyst at Orient Finance, said. “Yesterday’s statement sent out a clear signal that it will head to an easing direction in the second half of the year. It may also be a move by the government to help developers amid the credit crunch and boost the economy.”
Former Premier Wen Jiabao in March stepped up a three-year campaign to cool home prices, ordering the central bank to raise down-payment requirements for second mortgages in cities with excessive cost gains and telling local governments with the biggest price pressures to tighten home-purchase limits.
A slowdown in economic growth for a second quarter means the government can’t afford to crack down on the property market further, Gong said.
In Hong Kong, eight out of the 10 best performers on the MSCI China Index were Chinese developers. China Overseas Land & Investment Ltd., the biggest state-owned developer, rose to the highest in almost two months, adding 1.6 percent to HK$22.35, while Guangzhou R&F Properties Co. jumped by the most in three weeks, advancing 6.7 percent to HK$12.06.
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