Chinese property developers fall on a weak yuan
The decline is also caused by ongoing controls to curb home prices in mainland China
Chinese property stocks in Hong Kong and China dropped on Friday under the weakest yuan in a year, continuing the trend of a sector which has been falling in recent months.
A depreciation of the yuan, which was at its lowest in a year by Thursday’s market close, and government policies to control home prices have caused a continued downfall of the property market.
“The depreciation of yuan is definitely taking its toll on the property stocks as properties are major assets denominated in yuan,” said Wang Chen, a partner at Xufunds Investment Management in Shanghai. “And also the current tightening measures against the property market are harsher than was expected. So the negative sentiment on the sector will probably persist.”
China Overseas Land & Investment ended the day down 1 per cent to HK$23.40, having earlier broken a yearly low in share prices when it sunk to HK$22.80.
Many Chinese developers dropped to monthly lows during trading, with some making a comeback by market close.
Country Garden Holdings rose 2.8 per cent to HK$12.66, recovering from the monthly low of HK$11.60 it touched at midday.
New World Development, a Hong Kong-based developer with assets in the mainland, hit a monthly low of HK$10.52 earlier in the day, but finished at HK$10.70, the same share price as Thursday’s close. Sunac China Holdings also ended unchanged from the previous close, at HK$24.20, etching back from a low of HK$22.60 earlier in the day. It saw the largest turnover of property stocks during Friday’s session, at a total HK$1.7 billion.