China Postpones Land Auction, Stocks Fall

Mayank Mehta
28 Apr, 2010
New York City

Property developers led the decliners in Hong Kong and Shanghai trading. China postponed a residential land auction to next month after bids exceeded the upper limit set by the government. Beijing will issue new directive for second and third homes in the city.

[R]9:00 AM Hong Kong, China – Property developers led the decliners in Hong Kong and Shanghai trading. China postponed a residential land auction to next month after bids exceeded the upper limit set by the government. Beijing will issue new directive for second and third homes in the city. Bank of Beijing 2009 net profit edges up. Bank of China first quarter net increase 41%. Haitong Securities posts expected flat first quarter net.[/R]

Markets in China declined along with other markets in Asia after the sovereign debts of Greece and Portugal were downgraded. The downgrade prompted a sell-off around the world. Spain, Ireland and Italy may face debt restructuring or significantly higher interest rates this year.

The fallout from the downgrading of Greek debt to “junk” status continued to affect market sentiment on fears that a sovereign debt default contagion may not be contained. Stocks and commodities declined in Asia and Europe.

Yields on Greek two-year bonds soared to 23% and on 10-year bonds surged to 11.1%.

Hang Seng index in Hong Kong decreased 312.39 or 1.47% to 20,949.40 and CSI 300 index in China lower 11.06 or 0.36% to 3,097.35.

Property stocks continue to lead decliners in Hong Kong and Shanghai trading as investors fear more clamp down on speculators and developers. Poly Real Estate declined 1.9% and China Merchants Property Development Co. fell 0.8%.

Beijing canceled a residential land lot auction today after the bids received from developers deemed too high. Regulators are taking cautious approach and discouraging buyers from paying too much for plots.

The land auction in Beijing was postponed to May 7, after bids exceeded the top limit of 4,700 yuan per square meter.

Shanghai Movers

Bank of Beijing Co., Ltd added 1.7% to 13.42 yuan after the lender said first quarter profit rose 4% to 5.631 billion yuan.

Bank of China Limited rose 0.2% to 4.05 yuan after the lender said first quarter net profit increased 41.2% to 26.23 billion yuan.

China Railway Construction Corporation Limited fell 0.2% to 7.86 yuan after the stock was upgraded to “outperform” from “neutral” by Credit Suisse Group AG.

Haitong Securities Company Limited rose 0.6% to 13.19 yuan after the brokerage reported flat first-quarter earnings, in line with market expectations.

PetroChina Company Limited rose 0.6% to 12.00 yuan after the oil company said high crude price lift first quarter profit surged.

ZTE Corporation rose 0.2% to 41.66 yuan after the maker of phone equipment said net profit increased 40% in first quarter 2010.

HK Movers

China Overseas Land & Investment Limited rose 0.5% to HK$14.78.

China Resources Land Limited added 0.1% to HK$14.10.

Wheelock and Company Limited rose 0.8% to HK$23.55 after the company plans to take its property arm, Wheelock Properties Ltd private for HK$6.9 billion.