EU launches in-depth probe into German rescue of Hypo Real Estate

Special Report: Global Financial Crisis

BRUSSELS, May 7 (Xinhua) -- The European Commission launched an in-depth investigation on Thursday into state support measures for German bank Hypo Real Estate.

The commission, the European Union (EU)'s competition guardian, said it would examine whether the measures will ensure the company's long-term viability and avoid distorting competition.

"In view of the difficult situation of Hypo Real Estate and the large amount of aid involved, the commission has decided to carry out an in-depth investigation into the aid package for Hypo Real Estate in order to ensure legal certainty and allow interested third parties to give their views," Competition Commissioner Neelie Kroes said.

Hypo Real Estate, headquartered in Munich, is a major victim of the financial crisis in Germany. Berlin has granted 102 billion euros (136 billion U.S. dollars) of credit lines and debt guarantees to keep it afloat.

Germany notified in April a restructuring plan for Hypo Real Estate. The notification temporarily extends the legality of a previous 35-billion-euro (46.6 billion dollars) state guarantee.

The commission said the detailed investigation would evaluate whether the planned measures are capable of restoring the long-term viability of the bank, whether state support is limited to the minimum necessary and whether measures should be put in place to minimize potential distortions of competition created by the aid.

The decision came after the German government's Soffin fund raised its stake in Hypo Real Estate to 47.3 percent, moving closer to gaining control of the commercial real-estate lender.

The commission said its probe would also cover the deal and the prolongation of another 52-billion-euro (69.2 billion dollars) guarantee granted under the German banking rescue scheme.

It added the opening of an investigation is common for state interventions of this magnitude and will ensure legal certainty for the companies concerned.

China's real estate market still waits for recovery

Special Report: Boao Forum For Asia
2009

Special
Report:Global Financial
Crisis

BEIJING, April 20 -- Spring is yet to come to China's
housing market, and the government should take more measures to stimulate real
estate development, said Ren Zhiqiang, President of Huayuan Group, at a breakout
session of the 2009 Boao Forum for Asia Annual Conference in Hainan Province on
Friday.

China's real estate market has shown no sign of any
remarkable recovery so far. After the global financial crisis broke out, the
Chinese government worked out a 4-trillion-yuan emergency plan to boost the
domestic economy. To date, however, only some 200 billion yuan has gone to the
real estate market, and this investment is far from adequate to bring about any
radical change, said Ren Zhiqiang.

Ren Zhiqiang, President of Huayuan
Group, at a breakout session of the 2009 Boao Forum for Asia Annual
Conference in Hainan Province on April 17, 2009. (Photo:
china.org.cn)
Photo
Gallery

As the global financial crisis unfolds, China has
loosened some restrictions on the market in second-hand homes. Duties like stamp
tax and land appreciation tax have been cut down to some extent. Most banks,
however, are still taking a wait-and-see attitude because they have learnt a
serious lesson from the global financial crisis and are not confident of the
development of the domestic housing market, Shi Nengzi, a partner in Deloitte
Consulting China, pointed out.

To help the industry get through these tough times,
Ren Zhiqiang appealed to the government to launch more positive policies and
further reduce such taxes as business tax and tax on dividends.

Pan Shiyi, Chairman of SOHO China Ltd,
receives interview by journalists from Xinhua News Agency in Boao, a
scenic town in south China's Hainan Province, April 17, 2009. The Boao
Forum for Asia (BFA) Annual Conference 2009 kicked off here Friday.
(Xinhua/Zhao Yingquan)
Photo Gallery

Ren's view, however, was countered by Pan Shiyi,
another real estate developer who owned many skyscrapers in Beijing's Central
Business Districts. According to Pan, the government has taken all possible
measures to support the real estate market, and now the only thing left to do is
to wait and see the results.

(Source: china.org.cn)

Chinese equities edge up 0.54%, led by real estate

Special Report:Global Financial Crisis

BEIJING, April 14 (Xinhua) -- Chinese equities ended Tuesday's session slightly up by 0.54 percent, bolstered by a strong rebound in real estate shares in the afternoon.

Analysts said market confidence remained robust on hopes of a recovery in the first quarter. They said steady performance of heavyweights and rises in sectors such as real estate and auto helped offset the sell-off pressure.

Property developers gained across the board on signs of a recovery in the market, as the National Bureau of Statistics said a day earlier that house prices in 70 Chinese major cities rose 0.2 percent in March from a month ago.

China Vanke, the nation's largest property developer by market value, added 3.06 percent to close at 8.76 yuan. Shanghai-based Shimao Co. rose the most by 9.98 percent to 11.57 yuan.

Auto producers gained broadly on speculation the government will reveal more measures to boost auto consumption and sale. SAIC Motor, China's largest auto maker, surged 8.41 percent to 10.57 yuan.

Electronics and information sectors also rose, as the country is expected to announce details on the stimulus package for the sectors. Shandong-based Langchao Cheeloosoft Co. rose the most by 9.98 percent to 12.23 yuan.

Industrial and Commercial Bank of China, the nation's biggest lender, gained 0.49 percent to 4.14 yuan. Sinopec rose 1.16 percent to 9.58 yuan, while PetroChina retreated 0.42 percent.

The benchmark Shanghai Composite Index finished the day at 2,527.18 points, up 13.48 points from the previous closing. The index has gained nearly 8 percent since Wednesday, advancing for four consecutive trading days.

The Shenzhen Component Index went up 1.45 percent, or 138.38 points to close at 9678.18.

Gains outnumbered losses by 569 to 278 in Shanghai and 560 to 172 in Shenzhen.

Combined turnover shrank to 252.32 billion yuan (37.1 billion U.S. dollars) from 280.46 billion yuan the previous trading day.

"It is highly possible the market will continue to advance next week," said Han Ming, a Guosen Securities analyst. He believed that an economic recovery, abundant liquidity and positive peripheral markets in the near term would support the upward movement.

China Merchants Securities said in a report that recent market performance reflected pro-optimistic anticipation in the Chinese economy.

It said strong economic data of the first quarter would strengthen such anticipation, but the market would experience corrections if the data fail market expectations.

China is expected to announce its first-quarter economic data Thursday.