Wednesday, June 17, 2009

China Property Stocks Shine

. Wednesday, June 17, 2009

By stockOzone team

The Shanghai Composite Index .SSEC ended up 34.101 points at 2,810.123, its highest close in a week and near a 10-month closing high of 2,816.247 hit last week.

Gaining Shanghai A shares outnumbered losers by 712 to 204, while turnover in Shanghai A shares rose to 117.6 billion yuan ($17.21 billion) from Tuesday's 107.9 billion yuan.

Vanke climbed 9.7 percent to 11.88 yuan after the official China Securities Journal quoted Vanke Board Secretary Tan Huajie as saying that the proportion of real estate purchased for investment purposes rather than for individual use had risen.

Advisers CB Richard Ellis on Tuesday said Chinese property prices would stabilise over the rest of 2009, supported by government stimulus measures.

Analysts added that stronger-than-expected property sales were lifting the sector and the index now appeared likely to touch a new high for the year in the short term.

"Demand and sales in the property sector both seem strong, encouraging money to pour into the sector's shares," said Haitong Securities analyst Zhang Qi.

Several health product stocks gained as the H1N1 flu virus spread. Guilin Layn Natural Ingredients (002166.SZ), a health food products maker, surged by its 10 percent daily limit to 31.85 yuan as the number of confirmed H1N1 flu cases in China climbed to 226 as of Monday. The company's share price has surged by more than 2-½ times in less than two months.

Disclosure: Author does not own any of the stocks discussed here.

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