(Yicai Global) Dec. 6 -- Singapore’s sovereign wealth fund GIC Private has sold a large part of its stake in Chinese real estate developer China Vanke following a recent upsurge in the value of the builder’s shares.

From Nov. 14 to 30, GIC sold 40 million shares of China Vanke, reducing its stake in the Shenzhen-based builder's H shares to 6.89 percent from over 9 percent, data released by the Hong Kong Stock Exchange showed. It sold 5.73 million of the shares on Nov. 30, getting nearly HKD100 million (USD12.9 million).

Market insiders said the move came after a recent recovery in China Vanke’s stock price on the back of government policies to support the country’s embattled real estate sector, and is a normal transaction for an overseas institutional investor.

A series of favorable policies have been released since the middle of last month. On Nov. 11, the People’s Bank of China and the China Banking and Insurance Regulatory Commission said financial support would be offered to aid the property market’s steady and healthy growth. The China Securities Regulatory Commission announced on Nov. 28 it would lift a years-long ban on equity refinancing by listed developers.  

Between Nov. 11 to 29, the Hong Kong-traded shares of China Vanke climbed from HKD11.66 to HKD16.56 (USD2.13), surging by as much as 13.6 percent on Nov. 29 alone. 

GIC’s stake reduction is a normal transaction following the short-term rebound in China Vanke’s share price, said Zhuang Hongdong, chairman of Guangdong-based fund manager Nailao.

The latest policies aim to provide developers with fundraising-related support on the supply side, while also relaxing purchase limitations, such as lowering loan-related standards for defining first-time or second-time homebuyers. As a result, market confidence in the real estate sector, especially in private developers, has recovered somewhat.  

Amid falling global asset prices, institutional investors will make more adjustments in their positions, said Lin Jiayi, chief executive of Guangzhou-based private equity fund manager Xuanjia.

Editor: Tom Litting