During the weekend, six Chinese cities tightened property policies, including Beijing, Shijiazhuang, Guangzhou, Zhengzhou, Changsha and Baoding. Prior to this, another eight cities also tightened their policies since 1 March, including Zhuozhou, Hangzhou, Laishui, Nanchang, Jiashan, Ganzhou, Qingdao and Nanjing.
Nomura said single city tightening has limited impact on share price, but several cities together can trigger potential correction.
Consistent with Nomura's previous view, single city tightening had limited impact
on share prices. During 1-16 March, eight cities tightened policies, but property share prices rallied 14% on average.
However, several cities tightening together can trigger a potential correction, because it can catch more attention, affect market sentiment, and raise concerns that the government is getting more serious and that the policies may spread over to more cities.
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