Housing price hunch lifts mainland stocks

By Zhang Shidong (China Daily)
Updated: 2011-03-24 11:10
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SHANGHAI - Stocks on the Chinese mainland rose for a fourth day on speculation fresh earthquakes in Japan will boost demand for non-nuclear energy and local governments will set targets for housing prices that are higher than analysts' estimates.

A gauge of real-estate companies jumped the most in two weeks, led by China Vanke Co. TBEA Co, a manufacturer of electrical transformers, and solar cell maker Zhejiang Sunflower Light Energy Science & Technology Co jumped more than 3 percent after a series of temblors struck near Japan's crippled nuclear power station.

"In general, stocks' valuations are low and that's enough to attract buying interest for bargains," said Luo Bin, general manager at Shanghai Mingyu Xiaoyang Investment Management Co, which manages the equivalent of $60 million. "Japan's earthquake won't pose too big a problem to China's economy."

Related readings:
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Housing price hunch lifts mainland stocks Developers urged to sell houses at marked prices

The Shanghai Composite Index gained the most in a week, rising 1 percent to 2948.48 at the 3 pm close on Wednesday. The measure trades at 13.8 times estimated earnings, near the record low of 11.9 set in January 2006, according to weekly data compiled by Bloomberg. The CSI 300 Index rose 1.3 percent to 3264.93.

A gauge of 34 real estate stocks on the Shanghai Composite jumped 2.7 percent, the most since March 4 and the biggest gain among the five industry groups. Vanke rose 2.41 percent to 8.50 yuan ($1.30). Poly Real Estate Group Co advanced 3.91 percent to 13.29 yuan.

"There's market speculation that local governments will set a target of limiting housing price gains to between 0 percent and the GDP growth rate," said Wang Weijun, a strategist at Zheshang Securities Co in Shanghai.

Zhejiang Sunflower added 3.41 percent to 28.18 yuan.

China Shenhua Energy Co rose 1.99 percent to 28.75 yuan. Yanzhou Coal Mining Co climbed 4.7 percent to 33 yuan.

China CNR Corp rose 2.65 percent to 8.12 yuan after the company said it plans to raise as much as 10.7 billion yuan by selling up to 1.5 billion shares in a private placement.

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