Index rebounds as developers jump on home-sale policy

By Lydia Chen  |   2008-12-18  |     ONLINE EDITION

SHANGHAI'S key stock index rebounded from morning session's loss in the afternoon trading thanks to surges among developers after the government unveiled policies to boost the property market.

The Shanghai Composite Index gained 1.97 percent, or 38.88 points, to 2,015.69 points at 3pm.

The Shenzhen Composite Index, which tracks the smaller domestic market, also added 1.63 percent, or 9.87 points, to 617.27 points.

China Vanke Co, the nation's biggest developer, jumped 3.03 percent to 7.81 yuan (US$1.40). Beijing-based North Star climbed 2.69 percent to 3.43 yuan

China will reduce a tax on home sales to stem a property-market slump. Sale profits, rather than the total price, will now be taxed. The levy will be waived on properties sold two years after purchase, down from five years, the government announced yesterday.

Lenders also gained in the afternoon session. The Industrial and Commercial Bank of China, the country's largest lender and second biggest market heavyweight, advanced 2.12 percent to 3.86 yuan while Shanghai Pudong Development Bank surged 7.46 percent to 14.83 yuan.

Ping An Insurance Co, the nation's second-largest insurer, increased 7.22 percent to 29.56 yuan. China Life Insurance Co, the biggest insurer, rose 4.62 percent to 21.06 yuan after saying its 11-month income from premiums rose 53 percent to 280.8 billion yuan from a year earlier.

Aluminum Corp of China, the nation's biggest producer of the metal, added 1.69 percent to 7.82 yuan. The Beijing-based company had a pretax loss of 2.05 billion yuan in October and November after cutting prices and output due to weak demand, Dow Jones Newswires reported today.

PetroChina, the biggest market component, inched up 1 percent to 11.11 yuan. Zhou Jiping, vice general manager of China National Petroleum Corp, PetroChina's parent, said in a statement the company may reduce investment in projects by at least 10 percent next year.

China's state-owned companies have reported a combined 26 percent decline in net profit for the first 11 months on rising inventories and an increasing number of idle businesses, Xinhua news agency reported this week, citing Li Rongrong, head of the State-owned Assets Supervision and Administration Commission.