China’s property shares rose, rebounding from yesterday’s slump that sent a measure tracking real estate stocks to a seven-week low, on speculation the government may hold back further housing curbs as growth slows.
The gauge tracking developers on the Shanghai Composite Index added 0.7 percent at local closing after rising the most in three weeks earlier. China Vanke Co. (000002), the biggest listed developer on the mainland, climbed 2.4 percent to 8.19 yuan in Shenzhen, and Poly Real Estate Group Co. (600048), the second largest, also gained 2.4 percent to 10.8 yuan.
China’s biggest copper producer and its largest airline posted profits that missed estimates, joining banks and energy companies in providing evidence that slower economic growth is dragging down corporate earnings. The reports drove the Shanghai Composite down 2.7 percent yesterday, while the property measure lost 1.9 percent. The benchmark gauge declined 1.4 percent today.
“The country’s growth is slowing down, so investors are speculating that the government may not maintain an absolute stance on the tightening of the housing market,” said Dai Fang, a Shanghai-based property analyst at Zheshang Securities Ltd.
Premier Wen Jiabao announced at the beginning of a national lawmakers’ congress on March 5 an economic growth target of 7.5 percent for this year, down from 8 percent over the past seven years. He also said easing the property measures could cause “chaos.”
Chinese corporate profits won’t grow at all this year, according to Societe Generale SA.
--Bonnie Cao. Editors: Linus Chua, Andreea Papuc
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