Profit taking bring real estate shares down, banks drop on concerns about rate of credit growth
Chinese markets declined,led by property and financials. The Shanghai Comprehensive Index dropped 1.13 percent to 3089.45. The Hang Seng Index declined 0.65 percent to 17862.27, the lowest in two weeks.
The Hang Seng Growth Enterprises Index slid 0.59 percent to 580.19. The Hang Seng China Enterprise Index lost 1.41 percent to 10674.67. The mainland small and medium enterptrises SME Comprehensive Index, however, added 0.62 percent to 4420.42.
Taiwan's TAIEX Index advanced 0.98 percent to 6715.22. PetroChina Co. (SH:601857; HK:0857), the nation’s largest oil producer, dropped 2.24 percent on Shanghai trading and 2.04 percent on Hong Kong trading as price of crude oil dropped. China Shenhua Energy Co. (SH:601088; HK:1088), the country’s largest coal miner, lost 1.97 percent on Shanghai and 2.46 percent on Hong Kong. Shanxi Xishan Coal and Electricity Power Co.(SZ:000983) dropped 5 percent.
Alchohol shares jumped as China's traditional spirit producers mulled raising the prices of key brands. Hebei Hengshui Laobaigan Liquor Co.(SH:600559) and Anhui Gujing Distillery Co.(SZ:000596) surged to the 10 percent trading cap. Wuliangye Yibin Co. (SZ:000858) advanced 2.13 percent. The company may raise the price of its main product by RMB 59 per bottle. China Mengniu Dairy (HK:2319), the nation’s biggest maker of liquid milk, rose 1.15 percent after Cofco (Hong Kong) Ltd. and Hopu Investment Management Co. agreed to buy a 20 percent stake in the company.
Banking risk
China’s banking regulator said rapid credit growth poses a risk to the nation’s lenders and a concentration of credit extended to some industries and businesses may lead to problems for the financial system.
Industrial and Commercial Bank of China (SH:601398;HK:0398), the nation’s largest lender, declined 2.16 percent on Shanghai and 1.52 percent on Hong Kong. China Construction Bank Co.(SH:601939; HK:0939), the second largest, lost 3.04 percent on Shanghai and 1.21 percent on Hong Kong.
Property shares decline on profit taking
China’s property shares surged 12 percent on average last week on expectations of higher home prices. This week, however, they lost their momentum and fell today on profit taking.
China Vanke Co. (SZ:000002), the nation’s largest listed developer, declined 2.49 percent. Poly Realestate Co.(SH:600048), the second-largest,lost 3.20 percent. Beijing Capital Development Co.(SH:600376) dropped 7.57 percent.
The Hang Seng Property Index retreated 0.08 percent. Hengli Properties Development (HK:0169) plunged 12.33 percent. Shanghai Forte Land Co.(HK: 2337) dropped 8.36 percent. SRE Group (HK:1207) lost 8.04 percent.
Analysts at Nomura securities said today that China’s property market rebound was fueled by speculation as a result of national policies designed to boost GDP. They say it’s hard to predict how big the fallout may be from what will probably turn into China's biggest ever property bubble.
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