Real estate developers strengthen Chinese markets
China’s benchmark indices advanced, pushed up again by property shares, despite news that profits of industrial enterprises sank 22.9 percent in the first five months from a year earlier. The Shanghai Comprehensive Index climbed 0.11 percent to 2928.21, ending the week with a gain of 1.66 percent. The small and medium enterprises SME Comprehensive Index slid 0.12 percent to 4339.06. The Hang Seng Index rose 1.78 percent to 18600.26, 3.79 percent higher than last Friday. The Hang Seng Growth Enterprises Index advanced 2.72 percent to 586.74. The Hang Seng China Enterprises Index climbed 2.54 percent to 11037.14. Taiwan’s TAIEX Index gained 0.09 perent to 6463.56. Industrial & Commercial Bank of China (SH:601398; HK:13987) advanced 2.02 percent on Shanghai and 1.11 percent on Hong Kong. Banks extended a record 5.84 trillion yuan of loans in the first five months of 2009, almost tripling the number a year earlier, according to the central bank. Lending this month was fueled by loans for real estate and funding of government projects, the Beijing-based China Securities Journal reported today. China’s ample liquidity has pushed up house and land prices. Pan Shiyi, president of the Hong Kong-listed developer Soho China (HK:0410), said China’s property bubble today is even worse than before the pull back in 2007. Mainland-listed property shares gained 2.14 percent on average. The Hang Seng Property Index advanced 2.83 percent. China Vanke Co.(SZ:000002), the nation’s largest listed developer, advanced 1.12 percent. Poly Real estate Co.(SH:600048), the second-largest, added 1.41 percent. Developers such as Zhejiang WHWH Industry Co. (SH:600576), Chongqing Yukaifa Co.(SZ:000514), Shunfa Hengye Corporation (SH:000631) and Cosmos Group Co.(SZ:002133) surged to the 10 percent trading cap. Shimao Property Holdings (HK:0813) rose 5.70 percent. Central China Real Estate (HK:0832) gained 5.22 percent.
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