China already stomping on property

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From Bloomie:

China Securities Journal reported many banks have started to control the scale of loans for property development. Haitong Securities Co. sank 3.9 percent, leading declines among brokerages. Jiangxi Copper Co. (600362) dropped 1.4 percent before reporting profit. Dongfeng Automobile Co. fell 2 percent after 2012 net income slumped.

The Shanghai Composite Index (SHCOMP) lost 1.5 percent to 2,292.31 as of the 11:30 a.m. local-time break. It fell 0.1 percent yesterday following a four-day, 3.9 percent rally that drove it to a two-week high. The CSI 300 Index, which tracks stocks in Shanghai and Shenzhen, retreated 1.7 percent, the most since March 4, to 2,569.79. Hong Kong’s Hang Seng China Enterprises Index sank 0.7 percent.

“There’s concern property curbs may impact the economy and investors started selling the bigger stocks like financials,” said Cao Xuefeng, an analyst at Huaxi Securities Co. in Chengdu. “This will be a short-term sell-off. Prices are still reasonable so investors will be back.”

…A gauge of financial shares in the CSI 300 Index (SHSZ300) lost 2.1 percent, the most among 10 industry groups. Minsheng Banking sank 4 percent, the most since March 12, to 10.56 yuan.

Many banks have started to control the scale of loans for real estate development to coordinate with new property curbs, the China Securities Journal reported today. The China Banking Regulatory Commission is drafting guidelines on property loans including development loans and mortgages, the Journal reported, cited an unidentified person close to the regulator.

Also from China Securities Journal:

SHANGHAI, March 25 (Xinhua) — China’s real estate investment will lull later this year after surging in the first two months, the China International Capital Corporation (CICC) said Monday.

CICC said growth in housing sales will decrease due to tightened monetary policies and a harsh policy package aimed at curbing property prices.

China’s housing market started heating in the last quarter of 2012 after a long slump.

In January and February, the total sales area for commercial housing jumped 49.5 percent year on year, 47.7 percentage points higher than last year’s growth, data from the National Statistics Bureau showed. Real estate investment increased 22.8 percent year on year.

However, the CICC said new monetary policies will not fuel the sales boom. Credit growth is set to fall, as the government has lowered its monetary supply growth target.

“Regulators will also tighten shadow banking, restricting the financing conditions for real estate,” CICC said.

The central government issued a strict policy package last month to contain housing prices, with a 20-percent tax on capital gains from property sales.

The CICC predicted that sales will be dampened in the second and third quarters of 2013.

“Real estate investment will not grow notably faster than last year,” the CICC said.

Not great news for iron ore, which is why the miners are getting pulverised today (though God knows it shouldn’t surprise anyone). Rebar futures were also down:

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Comments

  1. Pulverised? FMG only off 1.7%. Not much for a stock that regularly moves more than 3% a day.

      • No, I’m only happy when FMG really is getting pulverised 🙂

        Cue amateur psychoanalysis from the MineBot…

        • I just don’t ‘get’ your irrational loathing of FMG and its employees. Really weird I reckon.

          • dumb_non_economist

            If at me I don’t have a “loathing” of FMG, I was laughing at this last sentence!

            “New” avatar this arvo? Feeling chipper compared to earlier?

          • Nothing against FMG’s employees. Its mainly schadenfreude at the expense of Twiggy, but only because HPPL isn’t publicly listed.

          • dne, if the second avatar makes you feel chipper you need help!

            The first, Albo, looked as sad I a reckon he must feel.

          • dumb_non_economist

            2d, I was asking if YOU were feeling chipper compared to your previous ava.

            You’re right, I do need help so I’m heading down to Hyde Park to get it!

    • FMG is down from its peak at 5.47 to 3.81 – not moving much at moment compared to the junior miners.

      Disc: I’m short FMG and AGO

      PS: March has been a very good month….. 😀