Money

Rising sales push Vanke shares to 3-month high

By Bonnie Cao (China Daily)
Updated: 2011-04-08 13:23

A China Vanke Co booth at a property expo in Shanghai. Vanke's shares jumped 2.35 percent on Thursday at Shenzhen Stock Exchange, their highest close since Dec 21. [Photo /  China Daily]

Property company's stock jumps2.35% for best close since Dec 21

SHANGHAI - Shares of China Vanke Co jumped to their highest level in more than three months on Thursday. The advance came after the property company said March sales climbed and Goldman Sachs Group Inc told investors to buy Chinese property stocks.

Vanke's shares jumped 2.35 percent to close at 9.15 yuan ($1.40) at Shenzhen Stock Exchange, their highest close since Dec 21. Vanke's contracted sales rose 48 percent in March to 9.3 billion yuan from a year earlier, and more than doubled to 35.5 billion yuan in the first quarter, according to a statement from the company on Wednesday.

China's policy "will move to weaker tightening, as measures aiming at curbing inflation and cooling the property market have already started to work", Goldman Sachs analysts led by Hanfeng Wang and Helen Zhu wrote in a report on Thursday.

Related readings: China Vanke March property sales slow sharply  Vanke upbeat on home sales  Vanke's Wang becomes richest developer  China Vanke '10 net profit up 36.65%

The Chinese government earlier intensified efforts to curb speculation after prices rose for 19 consecutive months to December and climbed in 68 of the 70 cities it monitored in the first two months of this year. Vanke said that while overall sales increased, those in 14 major cities including Shanghai, Beijing and Guangzhou, usual targets for speculators, declined 37 percent, indicating that the measures are working.

Last month, about 40 Chinese cities said they will cap new home prices below annual economic and disposable per capita income growth. That pledge came after local governments were ordered to submit price control targets by the end of March.

"Property curbs are already showing a clear effect on the market with a sharp slowdown in transactions," Tan Huajie, Vanke's board secretary, said in the statement. Property sales are traditionally stronger in March than in February, when businesses shut for at least a week during the lunar new year holiday.

China should expand limits on home purchases from large cities to the entire nation in a bid to curb speculation, the State Information Center's economic forecast department said in a report published in the China Securities Journal on Thursday.

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