Chinese ADRs Post Best Week Since 2011 as Real Estate Sites Soar
Chinese stocks trading in New York posted their biggest weekly rally since late 2011, led by real estate websites after the central bank reduced down-payment requirements for first-time home buyers in a bid to bolster the industry.
The Bloomberg China-US Equity Index jumped 8.2 percent to 104.18 in the five days through Friday. American depositary receipts of SouFun Holdings Ltd., the country’s biggest real-estate information website, was the best performer, surging 29 percent to $7.24. Leju Holdings Ltd. posted the second-biggest gain, rallying 28 percent to $6.15. The Deutsche X-trackers Harvest CSI 300 China A-Shares ETF advanced 4.8 percent to $33.40 in a second consecutive weekly gain.
The real-estate websites surged after the central bank cut the minimum down payment for buyers in cities without purchase restrictions to 25 percent from 30 percent. The move was the latest in China’s effort to bolster an economy expanding at the slowest pace in 25 years. China’s real-estate industry accounts for more than a quarter of consumer demand, according to UBS Group AG. Property investment in August rose the least since 2000, while the inventory of new homes increased 16 percent from a year earlier, the statistics bureau data showed.
“The down payment cut will play a positive role in boosting property sales in smaller Chinese cities,” David Hong, a Hong Kong-based property analyst at China Real Estate Information Corp., said by phone. “It again shows real estate is still very important to China’s economic growth.”