Asian Real Estate and Commodity Shares Slide as Chinese Bank Loans Wane
A slowdown in Chinese development would spell a sharp decrease in demand for raw materials. Prices on the London Metal Exchange closed lower and Chinese mining companies went with them. Baoshan Iron & Steel dropped 3%, Jiangxi Copper slid 2.6% and Angang Steel was down 2.3%.
In Hong Kong, Bank of China and Industrial & Commercial Bank of China Ltd. both slumped 3.4% and developers with major interests on the Mainland lost value. Soho China plunged 3.7%, China Overseas Land fell 3.3% and Shimao Property lost 3.2%. Local developers also fared badly today, just as a report by Centaline Property forecast that a record number of new homes will be completed in 2010, according to Bloomberg. The agency predicts 14,159 private residences will be ready for occupancy. Today Glorious property tumbled 4.4%, Sun Hung Kai plummeted 3.2% Hang Lung fell 2.6% and Sino Land dropped 2.5%. Bloomberg reported last week that a Cheung Kong executive was predicting a price increase of 10% to 15% for luxury homes in the territory; shares in Cheung Kong dropped 1.9% today.
Cheung Kong owner and self-made billionaire Li Ka-shing has agreed to buy a $38 million stake in Jia Sheng Holdings, maker of electric car batteries, according to Bloomberg, which describes the move as similar to Warren Buffett's backing of BYD Co. Li Ka-shing's investment sent Jia Sheng shares soaring 62%.
Hong Kong-listed Chinese banks declined today. Industrial & Commercial Bank of China sank 3.4%, Bank of Communications fell 3.8%, Bank Of China sank 3.2% and China Construction Bank lost 2.9%.
In Japan, electronics makers plunged today as the yen strengthened, shrinking profits for Japanese-based companies. Hitachi lost 5.9%, Panasonic shed 5.3% and TDK fell 3.5%. Playstation 3 maker Sony fell 4.8% today and rival Nintendo slipped 0.5%. With share prices sliding, perhaps fewer people are in the mood for games.