(Yicai) July 19 -- Executives and controlling shareholders of listed Chinese property developers, including China Vanke, are raising their equity holdings in the companies to reassure investors amid the prolonged downturn in the Chinese real estate market.

Key managers at Vanke [SHE: 000002] increased their combined shareholding by CNY200 million (USD27.5 million), the Shenzhen-based construction giant announced on July 15.

China Fortune Land Development said on July 10 that Wang Wenxue, chairman and actual controller, along with some directors and senior managers, have lifted their share holdings by almost CNY16 million (USD2.2 million). Wang also intends to buy more of the Beijing-based firm’s stock [SHA: 600340] in the next six months, spending from CNY10 million to CNY12 million.

The entire property sector was still under pressure in the first half, and sales at most firms were poor, so executives and major shareholders are hiking their holdings to bolster investor confidence, The Paper today cited Guan Rongxue, senior analyst at the Zhuge Real Estate Data Research Center, as saying,

Beijing North Star [SHA: 601588] and its controlling shareholder will also buy shares worth between CNY35 million and CNY70 million up to an additional 2 percent of the total stock outstanding, it announced last week.

Moreover, Xinhu Zhongbao [SHA: 600208] revealed at the start of this week, less than 20 days since the last buying spree, that Quzhou Zhibao, the company’s largest investor, would hike its stake, spending from CNY50 million to CNY100 million. The price paid per share should not exceed CNY2 (US 30 cents), it said.

The purchases help safeguard the interests of core employees and shareholders, expressing senior management's long-term optimism about future prospects while underpinning expectations for investment returns and signaling stable fundamentals to the public, according to Liu Shui, director of enterprise research at the China Index Academy.

But any pickup in stock prices will depend on an industrywide recovery, Liu added, saying that in the first half, factors such as expectations for low household incomes, weak market sentiment, and an ongoing assumption that house prices will continue to fall, stymied demand and left investors cautious for the near term.

Editor: Emmi Laine