China Stocks Rise to One-Week High on Property CompaniesWeiyi Lim
China’s stocks rose, sending the benchmark index to the highest level in a week, as developers rallied on speculation the government will relax housing curbs.
Poly Real Estate Group Co. surged 7 percent and a gauge of real-estate shares jumped to a six-week high after the Shanghai Securities News said some Chinese cities are discussing easing curbs on home purchases. Anhui Conch Cement Co., the biggest maker of the building material, jumped to the highest level this year. Daqin Railway Co. rose after the nation’s economic planner said it will allow the market to determine rail freight prices.
The Shanghai Composite Index climbed 0.6 percent to 2,058.99 at the close. The index has fallen 2.9 percent this year on concern the economic expansion will falter without stimulus. Manufacturing data yesterday pointed to weakness in the economy, while the 21st Century Business Herald reported a building-materials company missed a bond payment, the second default for the country’s onshore note market.
“I suspect we may have seen the last of the declines for the time being,” Zhang Haidong, an analyst at Tebon Securities Co., said by telephone in Shanghai. “Data yesterday showed the economy isn’t doing well. Investors are expecting the government to unleash stimulus measures in the second quarter to ensure stable growth.”
The Hang Seng China Enterprises Index slipped 0.7 percent today, while the CSI 300 Index rose 0.8 percent. Trading volumes in the Shanghai index were 7 percent lower than the 30-day average, according to data compiled by Bloomberg.
China’s stocks extended gains today after the 21st Century Business Herald reported foreign investors may place A share orders through Hong Kong Stock Exchange. Achieving a breakthrough in mutual market access via a partnership with China counterparties is part of HKSE’s strategic plan, the Hong Kong company said.
Two calls to the media department of the China Securities Regulatory Commission went unanswered. Shanghai’s exchange operator didn’t immediately respond to questions sent by fax from Bloomberg news.
A gauge of developers in the Shanghai index jumped 3.2 percent, the steepest gain among five industry groups. Poly Real Estate, the second-biggest developer, surged 7 percent to 8.24 yuan. Gemdale Corp. advanced 2.8 percent to 7.09 yuan. China Vanke Co., the largest developer, surged 2.6 percent to 8.29 yuan in Shenzhen. Anhui Conch jumped 4.1 percent to 16.96 yuan.
Government officials in the cities of Changsha and Hangzhou told local property companies in meetings last week that local governments are considering property market stabilization policies, including relaxing home purchase curbs, the Shanghai Securities News reported, citing unidentified people in the property industry.
Home-price growth slowed for a second month in February, according to SouFun, the nation’s biggest real estate website. The Chinese government will curb real estate speculation and investment, while regulating the market differently depending on the city, Premier Li Keqiang said last month at the opening of the National People’s Congress in Beijing.
Xuzhou Zhongsen Tonghao New Board Co., based in the eastern province of Jiangsu, missed a 10 percent coupon payment due March 28 on 180 million yuan of notes it sold last year in a private placement, the 21st Century Business Herald said, citing an unidentified person.
The default of closely held Xuzhou Zhongsen would be the first default in China’s private-placement market for high-yield bonds from small- and medium-sized enterprises that started in 2012, according to Yang Aibin, a general manager at Pengyang Investment Management Co. It would also mark the second default in the local bond market after Shanghai Chaori Solar Energy Science & Technology.
Daqin Railway advanced 0.8 percent to 6.75 yuan. China will allow the market to determine rail freight prices, the official Xinhua News Agency reported yesterday, citing the National Development and Reform Commission.