China Construction Bank

China Construction Bank (CCB), the country’s third-largest lender, said its net profits increased in the third quarter.

According to a release CCB’s net profits grew 11.95% to RMB25.6 billion ($3.74 billion) from July-September.

Net interest income rose 14% to RMB57.1 billion in the third quarter. Net earnings were RMB0.11 per share, based on domestic accounting standards.

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That’s up 10% from the same period last year

At the end of September, the lender held subprime mortgage securities valued at $244 million.

Sadly, it also had $191 million in bonds issued by Lehman Brothers and $1.51 billion issued by Fannie Mae and Freddie Mac.

The government’s latest tax initiatives, which exempt first time property buyers from paying the stamp tax, helped buoy the country’s cooling real estate sector.

China also lowered the down payment from 30 to 20% for first time home buyers which strengthened the property market.

Analysts said these adjustments boosted CCB’s profitability as it is the nation’s leading mortgage lender.
Source: China View

Nicholas Loup Grosvenor

British real-estate development and investment firm Grosvenor launched a $600 million fund that will invest in China’s shopping malls and is seeking property-development opportunities in Shanghai.

Grosvenor’s Asia-Pacific chief executive, Nicholas Loup, said the company is maintaining its strategy of significantly expanding its presence in China in the next five to 10 years, despite the recent global financial turmoil. The firm, with $25.7 billion in assets under management at the end of 2007, would like Asia to eventually represent 20% of its total assets.
Source: Wall Street Journal

Property Report Asia states an investigation of 7,136 major real estate enterprises shows that:

57.2% of enterprises surveyed saw profit in the first half of this year unchanged from the same period of 2007.
39.3% predict their profit in the latter half of this year will remain the same as in the first half.
49.1% of real estate enterprises say their newly constructed area since this year was equal to the level in the same period of 2007.
40.4% say the area dropped.
0.5% say the area increased.

Prospects in the latter half:

50.1% hold that house sales in the latter half will drop by 5-10% year on year.
39% believe that sales will maintain the level of the year beforel.
10.9% hold it will increase.

The investigation shows that half of the 7,136 enterprises surveyed predict drops in sales in the second half, half believe the economic profit will not deteriorate in the same period.
Source: Property Report Asia

According to China Central Television (CCTV) China’s central government will promote the healthy development of the nation’s capital market and maintain the stability of the country’s property sector to prevent possible financial risks.

At a central government meeting attended by President Hu Jintao, Premier Wen Jiabao, the central government vowed to take all possible measures to curb the country’s excessive inflation.

It allowed the country needs to improve its macro-economic controls and boost the production of necessities including grain, edible oil and meat.

Chiming in, the central bank said the country is to take effective measures to prevent prices from rising too rapidly and guard against big fluctuations in asset prices.

Now a slight internal contradiction.

The consumer price index climbed 7.7% year-on-year in May. While that was down from the 8.5% rise in April, it was still well above the government’s target.

This has affected the stock market. The Shanghai stock index fell 14% in a week as investors focused on rising global oil prices and tighter domestic monetary policy by the central bank.
Source: Forbes

The National Development and Reform Commission (NDRC) has announced that property prices in 70 large and mid-sized Chinese cities rose 11% year-on-year in the first quarter.

The price rise is 0.8 percentage points higher than that in the previous quarter.

Prices of new apartments jumped 11.8%, down 0.4 percentage points from the same quarter last year, while prices of second-hand flats rose 11.5%, up 1.7 percentage points.

Prices of new non-residential properties were up 7%, 0.3 percentage points higher than the same quarter of last year, while those of second-hand non-residential properties rose by 8.9%, up 2.1 percentage points.

Prices of new properties in mid-sized cities rose faster in March than that of big cities such as Shanghai, Guangzhou and Beijing, which saw faster price rises in the 2006-2007 period.

Urumqi, capital of the northwestern Xinjiang Uygur Autonomous Region, continued to top the growth list with a 25.3% increase in March. It was followed by Haikou and Ningbo, which saw property prices rose 18.3% and 18.2%, respectively.

Beijing reported a 16.9% hike in prices of new properties in the previous month.

In contrast, prices of new homes in Shenzhen, a southern city bordering Hong Kong, and Nanjing, capital of east China’s Jiangsu Province, fell 4.9% and 0.8%, respectively, from the previous month.
Source: China View