Nov. 18 (Bloomberg) — China’s new-home prices fell in all but one city monitored by the government last month as developers offered discounts to cut inventories.
Prices dropped in 69 of 70 cities in October from September, the National Bureau of Statistics said today. That’s the same as in September, which was the most since January 2011 when the government changed the way it compiles the data.
Home prices will continue to decline “modestly” next year as developers offer promotions or discounts to reduce stock that will remain high, according to Moody’s Investors Service. Housing sales slumped 10 percent in the first 10 months of this year amid tight credit and an economic slowdown, prompting the government to ease curbs on an industry that has become a drag on growth.
New-home prices in 100 cities tracked by SouFun Holdings Ltd. fell 0.4 percent in October from September, dropping for the sixth consecutive month. The average price fell 0.5 percent from a year earlier, the first decline after 22 months of gains, China’s biggest real estate website owner said Oct. 31.
Chinese stocks dropped, with the benchmark index declining for a fourth day, as falling home prices added to concerns that an economic slowdown will deepen and an exchange link with Hong Kong failed to lift sentiment.
Poly Real Estate Group Co. and China State Construction Engineering Corp. dropped at least 1.6 percent. New-home prices fell in all but one city monitored by the government last month as developers offered discounts to cut inventories. Hong Kong Exchanges and Clearing Ltd. slid 2 percent, extending yesterday’s 4.5 percent drop, as mainland investors used less than 2 percent of their 10.5 billion yuan ($1.7 billion) quota in Hong Kong this morning.
The Shanghai Composite Index fell 0.3 percent to 2,466.65 at 9:56 a.m. local time, while the Hang Seng China Enterprises Index dropped 0.3 percent. Both indexes declined yesterday as the exchange link between the two cities debuted. International investors bought 1.2 billion yuan of Shanghai shares today, out of the maximum daily amount of 13 billion yuan, after using all the quota yesterday.
The CSI 300 Index dropped 0.3 percent, as gauges of energy and consumer staples companies declined most. The Hang Seng Index retreated 0.2 percent.
Sinotex Investment & Development Co., a Chinese maker of cashmere products, rose 9.9 percent as it traded for the first time since July. The company agreed to buy Essence Securities Co. in an 18.3 billion yuan ($3 billion) reverse merger.
Shanghai International Port (Group) Co. gained by the 10 percent daily limit as it traded for the first time in more than two months. The company said it will sell shares to its employees in a private placement.
JD.com Inc. sank the most yesterday since its U.S. debut after Asia’s second-largest e-commerce operator provided a fourth-quarter sales forecast that fell short of investors’ heightened expectations.
JD.com’s American depositary receipts tumbled 7.4 percent yesterday in New York, the biggest drop since its May initial public offering.
The Shanghai Composite is valued at 9.1 times 12-month projected earnings, compared with the five-year average multiple of 10.7, according to data compiled by Bloomberg.
