SouFun Holdings Ltd. led gains in Chinese home-listing companies trading in New York on speculation government stimulus will boost the country’s housing market after initial signs of a recovery.
SouFun, China’s largest real-estate information website, jumped 8.9 percent to $7.82, erasing its loss for the year as the shares climbed to a three-month high. Its smaller peer Leju Holdings Ltd. gained 7.6 percent, and online classifieds platform 58.com Inc. surged to a record. The Bloomberg China-US Equity Index advanced for a third day.
Web-based companies listing new and existing homes are rallying after fewer Chinese cities saw home prices fall last month and prices rose in Beijing and 11 other cities, according to government data released April 17. Authorities eased mortgage policies at the end of March to boost the property market, which has been a drag on the economy. The central bank reduced the required reserve-ratio for lenders this week for a second time in three months, after cutting interest rates twice since November.
“The government’s policy toward housing is going to be less restrictive in order to stimulate growth,” Gabriel Wallach, founder of North Grove Capital LLC in Boston, said by phone Wednesday. “Monetary policy would also be an important leading indicator of housing, and the liquidity will find its way into the stock and property market. It will benefit all companies in the real-estate business.”
Beijing-based SouFun’s American depositary receipts had dropped as much as 28 percent this year to a 20-month low on March 16. They have since rebounded 46 percent.
The People’s Bank of China on March 30 lowered the down-payment requirement for second homes and the finance ministry exempted homeowners from a sales tax to arrest a slide in home prices.
Leju’s ADRs rose to $9.16 in the largest gain in a month. E-House China Holdings Ltd., which owns Leju, added 1.7 percent to $6. 58.com, owner of a platform for local classifieds akin to Craigslist in the U.S., jumped 4.4 percent to $75.56, the highest since its debut in 2013.
Weibo Corp., owner of the Chinese Twitter-like social media service, surged 11 percent to $16.09, the highest in four months. Weibo will partner with Alibaba Group Holding Ltd. and the e-commerce operator’s finance arm to provide public services in 12 Chinese cities, including paying traffic fines and utility bills, according a statement from the Alibaba unit.
The Bloomberg index of the most-traded Chinese stocks in the U.S. advanced 0.9 percent to a record 128.55, extending its rally this year to 18 percent. The iShares China Large-Cap ETF, the largest Chinese exchange-traded fund in the U.S., climbed 1.7 percent in a third day of gain to $52.39, the highest level since May 2008.