Chinese stocks in New York fell the most in three weeks, led by SouFun Holdings Ltd. (SFUN:US), as China’s biggest real estate website posted the steepest four-day slump since 2011 on concern policy makers will step up efforts to curb rising home prices.
The Bloomberg China-US Equity Index (CH55BN) of the most-traded Chinese equities in the U.S. slid 1.7 percent to a four-month low of 90.34 yesterday. SouFun has lost 18 percent in four trading days, while Shanghai-based property agency E-House China Holdings Ltd. (EJ:US) has dropped 9.8 percent. Home Inns & Hotels Management Inc. (HMIN:US) led declines among travel-related companies on concern a new strain of bird flu that has caused deaths in China will deter tourism.
The nation’s largest cities, including Beijing and Shanghai, tightened rules around home purchases last week after policy makers asked local governments to bolster measures aimed at cooling the property market. New home prices in China rose the most in more than two years in March after the Cabinet ordered fresh real-estate restrictions at the beginning of the month. SouFun fell for the first time in eight months in March.
“China’s new leaders will continue with the policy direction of curbing fast gains in housing prices,” Ella Ji, an analyst at Oppenheimer & Co. who rates E-House the equivalent of buy, said by phone in New York. “We expect tougher measures including banks’ tightening mortgage loans and property taxes in a longer run. The market may cool given the tougher credit environment, and transaction volume will decline.”
The iShares FTSE China 25 Index Fund (FXI:US), the largest Chinese exchange-traded fund (FXI:US) in the U.S., tumbled 1.7 percent to $35.87 in New York, the lowest close since November. The Standard & Poor’s 500 Index (SPX) declined 1.1 percent to 1,553.69 as a private report showed growth in American payrolls trailed economists’ estimates last month.
SouFun, based in Beijing, plunged 6.6 percent to $22.14 in New York, the lowest level in four months. Its 18 percent slump since March 27 was the steepest four-day drop since October 2011.
New home prices climbed for the 10th month in March, rising 1.1 percent from February and 3.9 percent from the year earlier, SouFun said in an April 1 statement, citing a survey of 100 cities.
About 17 cities had reported property curbs by the end of the first quarter. Beijing banned single-person households from buying more than one residence, while Shanghai prohibited banks from giving credit to third-home buyers, the cities’ local governments said last weekend.
E-House slipped 1.6 percent to a one-month low of $4.35. It loss over the past four days is the biggest since December. IFM Investments Ltd. (CTC:US), a property brokerage service provider based in Beijing, fell 3.4 percent to $2.57 in U.S. trading, sinking the most since March 8.
Home Inns & Hotels Management Inc., the biggest operator of budget hotels in China, slid 5.3 percent to $26.52, the lowest level this year. Ctrip.com International Ltd. (CTRP:US), China’s biggest online travel agency, sank 4 percent to $19.94, the steepest slump since Jan. 25.
Three people have died of a new strain of bird flu in eastern China, the official Xinhua News Agency reported yesterday, and cases of the deadly virus were reported in a fourth location.
“Epidemic disease is one hard-to-predict risk factor for the travel sector,” Ming Zhao, the founder of 86Research Ltd. said in a client note yesterday. “At this point, bird flu is perceived as just a headline risk for shares” including travel agencies, he said.
American depositary receipts of China Southern Airlines Co. (ZNH:US), Asia’s biggest carrier by passenger numbers, dropped 4.4 percent to $26.60 in New York. A 2.4 percent discount in the ADRs to its Hong Kong shares was the widest since Feb. 25. China Eastern Airlines Corp. (CEA:US), the second biggest domestic carrier, based in Shanghai, retreated 4.7 percent to $21.10 in the biggest one-day decline since Dec. 21.
New Oriental Education & Technology Group (EDU:US) Inc., China’s largest private educational company, fell 5.7 percent to $16.51, losing the most in two months.
Oppenheimer’s Ji said should the bird flu develop to a more serious situation, it will impact companies such as New Oriental on concern big gatherings will help propagate the disease.
The Hang Seng China Enterprises Index in Hong Kong dropped 0.5 percent to a two-week low of 10,758.80 yesterday. The Shanghai Composite Index (SHCOMP) of domestic Chinese shares slipped 0.1 percent to 2,225.30, the lowest level since Dec. 27.
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