Japanese Shares Gain, Chinese Property Shares Slide on Tough Land-Buying Requirements


In Asia Friday, China's Shanghai Composite Index sank 1.2% to 3,013 and Hong Kong's Hang Seng Index dipped 0.1% to 21,210. In Japan the Nikkei 225 Index rose 0.8% to 10,751.

The Bank of Japan, the country's central bank, signaled that it may extend further support to banks by injecting even more cash into a fund that loans money to banks.

This, along with a weakening yen, sent many Japanese shares higher. Companies that are heavily dependent on income from exported goods rose today, especially car companies, which make up an enormous portion of products shipped abroad. Isuzu surged 4% and Nissan Motor rallied 2.4%. Honda gained 0.9% and even Toyota managed a 0.3% rise. Hino Motors, maker of heavy-duty trucks and diesel engines, racked up a 3.6% gain.

Fuji Heavy Industries, which makes industrial machinery including buses and parts for airplanes, soared 4.1%, and Kajima, a builder specializing in earthquake-resistant structures, climbed 3.8%. Taiheiyo Cement, a developer and building resource company concentrating on environmentally friendly business solutions, rocketed up 5.1%

In China, real estate shares continued to slide as the government considers new ways to cool the property market. According to some reports, Beijing may raise the amount buyers will need to deposit on parcels of land auctioned off for development. Bloomberg reports that some land has changed hands with as little as a 3% deposit.

According to China Economic Net, the new regulations will require a 20% deposit to be made before placing a bid and a 50% down payment within a month of signing contracts, or buyers will risk losing both the land and the deposit. The measures are intended to limit land hoarding and slow the rising price of property. Today Gemdale Corp. sank 2.9%, Poly Real Estate lost 1.6% and China Vanke slid 1.5%.

In contrast, property shares in Hong Kong surged as investors focused on the rising price of property, both in Hong Kong and the Mainland. New stimulus measures in China, which the government has vowed to continue, could mean more loans for home buyers and more demand in the marketplace. Hong Kong-listed Soho China, with development projects in Beijing's central business district, spiked 6.9%, Henderson Land soared 2.7% and Sun Hung Kai gained 1.4%. Sun Hung Kai's executive director told the press, "We don't see any bubbles in the market."

In the retail sector, Li & Fung sank 1.7% and Esprit Holdings slipped 1.3%. Lifestyle International Holding, owner of Hong Kong's giant Sogo department stores that sell everything from high-end Balenciaga handbags to plastic tableware, plunged 3.7%. Perhaps buyers are saving all their money for the down payment on that home, rather than luxury goods to put inside it.