The China Securities Regulatory Commission will make decisions regarding financing for real-estate projects based on examinations of the company and opinions of the Ministry of Land and Resources, according to a statement posted on the regulator's website on Aug. 9.
“There's optimism developers will be allowed to raise funds again,” Zhou Lin, an analyst at Huatai Securities Co., said by phone from Nanjing . “Investors are also putting money now into cyclical stocks such as energy and property because of the recent macro data.”
Chinese factory production increased 9.7 percent in July from a year earlier, retail sales advanced 13.2 percent while fixed-asset investment excluding rural households grew 20.1 percent in the first seven months of the year, according to the statistics bureau.
Eoin Treacy's view While the focus of media attention has been
on how well Wall Street has performed relative to other markets, it is probably
also worth considering that the Fed has provided one of the most accommodative
monetary environments in history while countries such as China and, more recently
India, have been attempting to curtail speculation. This has contributed to
China 's stock market being one of the worst performers globally over the last
Since economic growth has returned to a level monetary authorities have signalled they are reasonably happy with, the odds are now in favour of a lighter hand in terms of how the financial and real estate sectors are dealt with.
The Shanghai Property Index has been ranging mostly between 3000 and 4000 since 2010 and found support near the lower boundary in June. A sustained move below 3000 would be required to question medium-term scope for continued higher to lateral ranging.
The FTSE/Xinhua A600 Banks Index unwound its entire late 2012 rally but has firmed in the region of 8000 over the last couple of months. A sustained move below that level would now be required to question medium-term recovery potential.
With a positive tailwind from the mainland, the Hong Kong listed H-Shares Index (P/E 8.1, DY4.04%) is also rallying from the lower side of a two-year range. A break in the short-term progression of higher reaction lows would be required to question medium-term potential for higher to lateral ranging.
The Materials sector is also noteworthy because it has been such an underperformer. It found support six weeks ago in the region of the 2008 lows and a sustained move below 1200 would be required to question potential for at least an unwinding of the oversold condition relative to the 200-day MA.
While real estate, banks and materials represent by far the largest sectors in the Chinese market, smaller sectors have outperformed. The common characteristic that continues to ignite investor interest is exposure to the evolution of the middle class.
The CSI Healthcare Index reasserted its medium-term uptrend in late July and a sustained move below the 200-day MA would be required to question medium-term upside potential. The CSI Consumer Discretionary has also rallied impressively from the region of its 200-day MA.
Tong Ren Tang Technologies is one of China 's main Hong Kong listed medical companies. The share rallied from the region of the 200-day MA from late June to test the April peak by early August. While some consolidation in this region would not be unusual, a sustained move below the 200-day MA would be required to question medium-term upside potential.