Bullish stock market could dent real estate
By Hu Yuanyuan (China Daily)Updated: 2006-12-07 09:12
China's continually bullish stock market may have a negative impact on the
country's real estate sector in the long run by luring investors away, experts
said.
"The ever-increasing stock benchmark will weigh on China's
property market, but mainly on those markets featuring strong investment
initiatives," said Nie Meisheng, head of the Residential Industry Association of
the All-China Federation of Industry & Commerce.
But Nie told China
Daily that the impact on Beijing's property market would be very limited as only
one-third of property purchased in the capital is for investment
purposes.
The Shanghai A-share market the world's best-performing major
market this year with an 86 per cent rise seemed to be well on track to smash
its record high of 2,245.435 points, set on June 14, 2001.
Statistics
from the Shanghai Securities Journal show that 273,700 new accounts were opened
in November, a jump of 50 per cent compared with October.
After the
Shanghai benchmark index exceeded 2,000 points, there was a dramatic increase in
new accounts, which peaked on November 23 with the number reaching 19,500.
Meanwhile, stock-oriented funds have also been selling particularly well
recently. On December 1, a fund from ICBC Credit Suisse Asset Management Co
raised 12 billion yuan (US$1.53 billion) on the day of its launch, becoming the
first to reach its fundraising target within one day.
Dai Haosheng, a
researcher at a leading property developer, said that the bullish stock market
is unlikely to drag down real estate prices.
"The impact could almost be
negligible," Dai told China Daily.
Turnover in Shanghai-listed A shares reached a multi-month high of 52.9 billion yuan
(US$6.76 billion) on Monday, but that sum is still small compared with China's
huge deposits of some 1.4 trillion yuan (US$177 billion).
"Besides,
Chinese people don't have many investment channels," Dai added.
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