Asian Investors Continue to Put Money into Chinese Real Estate
Asian markets rose Tuesday. In China the Shanghai Composite Index racked up a 1.8% gain to end the day at 2,904 and in Hong Kong the Hang Seng Index rose 1.6% to 22,994. Japan's Nikkei 225 Index gained 1.5%, finishing the session at 10,371.
According to a new survey by the People's Bank of China, property remains the most popular investment among the Chinese, with 26.1% of those surveyed saying they planned to invest in property despite recognizing that prices are sky high. Around 75.5% or those queried admitted that prices are too high, but more than 43% said they thought values would continue to rise. "Many mainlanders believe investing in real estate to be the safest method of amassing wealth," one researcher from the Chinese Academy of Social Sciences told Asia Times Online. "This mentality helps suggest that the property market boom may continue."
Investors put their money on property today as analysts also bolstered faith that prices will continue to rise. One strategist from China-based Bohai Securities told Bloomberg, "There are opportunities in sectors with fair valuations such as property." And that's despite recent reports that homes in some major cities are overpriced by as much as 50%. Shares in Chinese property developers surged today with China Vanke and Poly Real Estate rocketing up to the 10% daily limit and Gemdale shooting up 8.6%.
A hike in oil prices benefited the energy companies responsible for heating all those new homes during these cold winter months. In places like Harbin, famous for its ice festival, temperatures are expected to fall to -15 by Friday. Today China Petroleum and Chemical soared 2% and PetroChina climbed 1.9%. China Shenhua, a coal-based energy firm, leaped 6% and China Coal Energy rose 3.7%
Hong Kong Developers Revel in Gains
In Hong Kong energy producers also gained with China Shenhua rising 3.7%, China Resource Power advancing 3% and Cnooc, an offshore oil explorer, gaining 3.1%.
Hong Kong developers reveled in gains with Sino Land zipping up 2.2%, Cheung Kong jumping 2%, and Sun Hung Kai and New World Development both rising 1.7%. Guangzhou R&F, a property company with operations in Beijing and in the industrial hotspot of Guangzhou, just across from Hong Kong, surged 4%. Evergrande, which designs and builds luxury developments in China ramped up 2.1% and Soho China, an expert in Japanese-style office/living spaces whose name stands for "Small Office, Home Office" rose 1.8%.
U.S. Recovery Boosts Japanese Exporters
High hopes that the U.S. economy really is on the rebound sent shares in Japanese exporters higher. Exporters of electronic goods closed higher with Sony rising 2.7%, Casio Computer advancing 2.1% and Canon up 1.6%.
Makers of heavy machinery made strides with Ebara, a manufacturer of pumps, turbines and environmental technology products like trash incinerators and water treatment systems, shot up 4.7% and Komatsu, providing bulldozers and excavators to miners around the world, advanced 1.5%.
Other big winners included Japan Tobacco, which spiked 4% and Fanuc, an industrial robot company outfitting factories the world over with machines that do jobs like sorting and wrapping products faster than any team of humans -- rewarding investors but jeopardizing thousands of jobs.
