Realty firms' share issues put on hold (2)

08:12, April 28, 2010      

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They also said banks can refuse loans to people buying third houses in areas with high property prices.

Since then, one government agency after another has released matching regulations.

On April 25, the CSRC and the MLR announced that the two agencies will jointly approve stock issue plans by real estate companies, including initial public offerings (IPOs).

Fund-raising proposals submitted to the CSRC by 45 companies face a longer waiting time now that the MLR has joined the screening process.

MLR officials specializing in land price matters are playing a major part in the screening process, China Daily has learned. And few - if any - companies are likely to get the green light, analysts said.

Su Xuejing, analyst at Changjiang Securities, said the policy change makes it "extremely difficult" for developers to issue stocks any time soon.

In the long run, the joint screening by the CSRC and the MLR could become part of the regulatory regime, he said.

Asked to assess the impact of the tightening guidelines, Li Jianfeng, analyst at Shanghai Securities, said he believes developers will suffer an industry-wide slowdown, but in the short term, most will hold up well thanks to remarkable sales growth last year.

Li asked investors to avoid real estate stocks, even though prices have dropped markedly.

Dong Xian'an, analyst at Industrial Securities, said the tightening policy will help bring down housing prices in some places but cautioned that some major developers will be negatively affected.

Cao Xute, analyst at Sinolink Securities, noted that while large developers come under central government scrutiny, smaller developers may raise money locally.

Source: Xinhua
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