Chinese property developers end higher as monthly data shows sales rebound
Chinese property stocks defied turbulence on the broader market on Friday, after data showed that home sales rebounded and shares of some developers slipped below book values.
A gauge of developers on mainland exchanges rose as much as 2 per cent before closing 0.6 per cent higher on Friday, according to financial data provider Great Wisdom. Rongan Property and Gemdale led the charge with gains of more than 3 per cent.
Meanwhile, renewed concerns about a trade war sent the benchmark Shanghai Composite Index down by 0.7 per cent, reflecting the lowest level since September 2016. The Trump administration has approved a US$50 billion tariff on the import of Chinese goods, in a strategy said to be targeted at thwarting Beijing’s ambition to establish itself as a technology leader.
Investors are taking a closer look at property stocks after official data showed nationwide home sales rose 8 per cent in May, reversing from cooling growth a month earlier. Property prices in 61 out of the 70 cities tracked by the government rose last month, compared with 58 for the previous month, the statistics bureau said on Friday.
Chinese property stocks had been among the worst-performing sectors until recently. The sector had the most number of companies with share prices sinking below book values among all industry groups apart from banks, as concerns mounted that further deleveraging will cut their funding access and exacerbate balance sheet woes.
Rongan Property jumped 6.5 per cent to 3.60 yuan and Gemdale added 3.2 per cent to 11.19 yuan, while Poly Real Estate Group rose 2.5 per cent to 13.99 yuan. Shanghai Shimao, controlled by tycoon Hui Wing Mau, gained 1.3 per cent to 4.61 yuan. The share traded Friday at a 21 per cent discount to its book value.