Wave of property curbing measures set to spark a nationwide flight to equities
In past fortnight, 20 cities have placed further limits on home purchases as local governments come under renewed pressure to rein in runaway prices
The recent nationwide clampdown on the Chinese property market has heightened expectations of a flight of funds from home purchases into shares buying, as sentiment among realty speculators weakens.
Retail investors now expect an influx in speculative capital to give the flagging stock market a shot in the arm, after a nine-day trading break for the National Day holiday, despite weak fundamentals remaining unchanged.
“It looks certain that market outlook, after the long trading break, will brighten,” said Zhou Ling, a hedge fund manager with Shanghai-based Shiva Investment.
“If the speculative mood turns out to be strong, there could be a really solid rally, lasting for a while.”
It’s not unusual for mainland investors, either habitual equity punters or those looking for a quick gain in the property market, to earmark larger portions of their assets in either direction.
But what appears like a sustained move by the authorities across the country to curb property purchases finally looks set to swing the pendulum , as they gauge the effects of the cooling measures.