Xinyuan Rises Most on Record on Signs of Housing SupportStephen Stapczynski
Xinyuan Real Estate Co. rose the most on record in February as shares of developers advanced amid optimism that China’s government is committed to countering a slump in the housing market.
Xinyuan, a Beijing-based developer, surged 52 percent for the month, the most since its U.S. debut in 2007. SouFun Holdings Ltd., China’s largest real-estate information website, rose 12 percent, the most since July, and E-House China Holdings Ltd. added 2.9 percent, the biggest advance since October.
Real-estate companies rallied in February as policy makers moved to boost lending in an economy growing at the slowest pace in 24 years, while data showed that new-home sales rose in December from a year earlier after the government removed property curbs and eased restrictions on credit. China is preparing measures to counter a housing market slump and will roll them out if the economy needs support, people with knowledge of the matter said this week.
“Sentiment has improved greatly for the real-estate sector,” Gabriel Wallach, founder and portfolio manager for North Grove Capital LLC in Boston, said by phone on Friday. “Monetary policy and policy toward real estate have been very tight for the last five years, and as the market slowed, we are expecting some easing now. Home builders have been performing better after trying to break out from multiyear flat-line.”
American depositary shares of Xinyuan rose 22 percent to $3.06 in New York on Friday, the biggest one-day jump since 2009. Total revenues increased 26 percent in the fourth quarter of 2014 from the year-ago period, the company said in a statement Friday. Diluted net earnings of 34 cents per ADS compared to 36 cents a year earlier.
SouFun, based in Beijing, slipped 4.3 percent to $6.84, while E-House’s ADRs added 0.1 percent to $7.07. Leju Holdings Ltd., an online real estate service provider that made its U.S. debut in April, fell 4.8 percent to $9.50, extending to 6.7 percent its decline in February.
The government could reduce down payment requirements for second-home purchases while another possible step may involve removing the sales tax after homeowners hold their property for two years -- down from a five-year minimum now, according to the two people familiar with the matter, who asked not to be identified as the information isn’t public.
An index of property stocks in Shanghai climbed 2.9 percent in February after policy makers at the beginning of the month lowered the amount of cash large lenders are required to set aside as reserves. The People’s Bank of China is furthering its efforts to stem a slowdown in the world’s second-largest economy, after it lowered benchmark interest rates in November for the first time in two years.
The Deutsche X-trackers Harvest CSI 300 China A-Shares ETF rose 7.2 percent to $36.35 in February while the iShares China Large-Cap ETF, the largest exchange-traded fund in the U.S. tracking Hong Kong-traded Chinese shares, added 6.1 percent to $43.76. A Bloomberg index of China’s most-traded stocks on American exchanges advanced 0.8 percent to 111.66.