<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0><TBODY><TR>Yanlord land deals: 'No help from ex-govt official'
</TR><!-- headline one : end --><!-- Author --><TR><TD class="padlrt8 georgia11 darkgrey bold" colSpan=2>By Alvin Foo, Markets Correspondent
</TD></TR><!-- show image if available --></TBODY></TABLE>
<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->YANLORD Land shares continued to come under selling pressure yesterday, despite company denials that it received illegal help from a high-ranking Chinese government official for its land purchases.
The stock - one of the 30 component shares of the Straits Times Index - fell to as low as 94 cents yesterday morning, when trading resumed following a suspension on Wednesday.
It closed down five cents, or 4.8 per cent, at 99 cents and was the most active counter with 38.9 million units done. Yanlord stock has declined 70.2 per cent this year.
The share plunge began on Wednesday, when leading China finance magazine Caijing claimed that Yanlord allowed Mr Kang Huijun, a former vice-governor of Shanghai's Pudong district, to buy a flat at the Yanlord Gardens in Pudong at a price substantially below market value.
The Shanghai Daily newspaper also said Mr Kang allegedly accepted another apartment at the complex worth 4.89 million yuan (S$1.02 million) in 2001 in exchange for land development rights.
Investors in Singapore quickly sold down the stock, which plunged nearly 18 per cent on Wednesday to $1.04 before a trading halt was imposed.
The Chinese luxury home developer said in a statement yesterday that all its land acquisitions, including those acquired through public tenders and auctions, were 'conducted in a legal and transparent manner'.
It said it sold two units at its Yanlord Gardens project to Mr Kang at 'launch prices' and saw the deal as viable, as the official's residence at the development would bring positive publicity.
Yanlord added that it 'did not receive any assistance from Mr Kang in obtaining the land use rights of any land parcels'.
'This type of news will have a negative impact on sentiment,' CIMB-GK analyst Alice Chong, who has an 'outperform' rating on the shares, told Bloomberg. 'However, I believe that the existing land bank is not related to any bribery case, as it has all been won through auction.'
DBS Vickers downgraded Yanlord from a 'buy' to a 'hold' yesterday, while slashing its target price from $2.06 to $1. It noted challenging conditions for Chinese developers in obtaining credit from banks and weak sales. DBS Vickers expects Chinese property prices to plunge by as much as 30 per cent, with levels rebounding to last year's peak only in 2012.
</TR><!-- headline one : end --><!-- Author --><TR><TD class="padlrt8 georgia11 darkgrey bold" colSpan=2>By Alvin Foo, Markets Correspondent
</TD></TR><!-- show image if available --></TBODY></TABLE>
<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->YANLORD Land shares continued to come under selling pressure yesterday, despite company denials that it received illegal help from a high-ranking Chinese government official for its land purchases.
The stock - one of the 30 component shares of the Straits Times Index - fell to as low as 94 cents yesterday morning, when trading resumed following a suspension on Wednesday.
It closed down five cents, or 4.8 per cent, at 99 cents and was the most active counter with 38.9 million units done. Yanlord stock has declined 70.2 per cent this year.
The share plunge began on Wednesday, when leading China finance magazine Caijing claimed that Yanlord allowed Mr Kang Huijun, a former vice-governor of Shanghai's Pudong district, to buy a flat at the Yanlord Gardens in Pudong at a price substantially below market value.
The Shanghai Daily newspaper also said Mr Kang allegedly accepted another apartment at the complex worth 4.89 million yuan (S$1.02 million) in 2001 in exchange for land development rights.
Investors in Singapore quickly sold down the stock, which plunged nearly 18 per cent on Wednesday to $1.04 before a trading halt was imposed.
The Chinese luxury home developer said in a statement yesterday that all its land acquisitions, including those acquired through public tenders and auctions, were 'conducted in a legal and transparent manner'.
It said it sold two units at its Yanlord Gardens project to Mr Kang at 'launch prices' and saw the deal as viable, as the official's residence at the development would bring positive publicity.
Yanlord added that it 'did not receive any assistance from Mr Kang in obtaining the land use rights of any land parcels'.
'This type of news will have a negative impact on sentiment,' CIMB-GK analyst Alice Chong, who has an 'outperform' rating on the shares, told Bloomberg. 'However, I believe that the existing land bank is not related to any bribery case, as it has all been won through auction.'
DBS Vickers downgraded Yanlord from a 'buy' to a 'hold' yesterday, while slashing its target price from $2.06 to $1. It noted challenging conditions for Chinese developers in obtaining credit from banks and weak sales. DBS Vickers expects Chinese property prices to plunge by as much as 30 per cent, with levels rebounding to last year's peak only in 2012.
