Developers Fall on Economy, Speculation of Curbs: Shanghai Mover
China Vanke Co. (000002), Poly Real Estate Co. (600048) and Gemdale Corp. (600383) led declines by shares of property developers on concerns that China’s economy is slowing and that authorities may introduce new curbs to rein in home prices.
A gauge of developers listed in Shanghai declined as much as 2.1 percent and was 1.7 percent lower at 2:05 p.m., heading for the biggest one-day drop since April 25. Vanke, China’s biggest publicly listed developer, fell as much as 2.9 percent in Shenzhen. Poly Real Estate fell as much as 3.8 percent and Gemdale dropped as much as 4.5 percent in Shanghai. China’s benchmark Shanghai Composite Index fell 1.1 percent.
Homes sales in China fell 13 percent in April from the previous month after measures ordered by the government this year, including higher down-payment requirements and strict enforcement of transaction taxes, began to take effect. The 21st Century Business Herald reported today that the city of Beijing is requiring developers get approval from the mayor’s office before they can begin pre-sales of homes.
“Weekly sales aren’t strong and there is speculation that the government may come out with more policies,” Jinsong Du, a property analyst with Credit Suisse Group AG in Hong Kong, said by telephone today. Weaker-than-expected economic data is another reason for the declines, Du said.
Data released by the National Bureau of Statistics yesterday showed fixed-asset investment growth unexpectedly decelerated for the first four months to 20.6 percent, compared with the 20.9 percent pace for the first quarter. The median of estimate of 37 economists surveyed by Bloomberg had been for fixed-asset investment growth of 21 percent.
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