The Shenzhen-listed shares of Vanke Co halted its slide on Wednesday after dropping by the daily limit the last two days, but analysts say a further drop is expected as the internal tussle for control of China's largest property builder has not yet been settled.
Vanke's stock prices rose nearly 5 percent in the day's early trading and closed up 0.05 percent at 19.8 yuan ($2.96) with overall transaction volumes reaching 20.106 billion yuan, a record high for the property firm since it was listed on the Shenzhen Stock Exchange.
Vanke's shares on the Hong Kong exchange continue to rise, closing up 0.85 percent at HK$16.56 ($2.13) on Wednesday.
According to a stock filing posted by Vanke on Wednesday, an affiliate of Baoneng Group, a dissenting shareholder in Vanke, bought more than 75.3 million Vanke A-shares, or a 0.682 percent stake, at the end of the trading day on Tuesday, bringing the group's total stake in Vanke to 24.972 percent.
"The move on Tuesday indicates that Baoneng not only wants to further its holdings in Vanke, but also intends to stabilize Vanke's shares," Li Zhanjun, director of the Research and Development Institute at E-house China, told the Global Times on Wednesday.
Baoneng continued increasing its holdings in Vanke during trading on Wednesday, according to Vanke's filing issued after the close of trading.
According to the filing, -Baoneng now holds a 25 percent stake in Vanke Co.
This is the first week that Vanke shares have been open for trading in the A-share market since being suspended in December 2015.
Trading in Vanke stock was halted for more than six months after Baoneng quietly bought up Vanke shares to become its largest shareholder.
There will likely be more days of shares falling by the daily limit due to the ongoing battle between Vanke's management team and shareholders as well as the uncertainty of who will end up in the control of Vanke, said Li.
"The battle has greatly fluctuated Vanke's stock prices over these days," Li noted.
The internal turf war over control of Vanke escalated in June, when Vanke's management team announced an asset restructuring plan with Shenzhen Metro Group which would have overtaken Baoneng as the largest shareholder.
Baoneng and China Resources, Vanke's prior primary shareholder, opposed the restructuring plan.
The shareholder battle, which has had a negative effect on Vanke's stock prices, should not affect the company's business performance in the short term as long as the management team remains unchanged, said Li.
According to a report issued on July 2, Vanke sold 190 billion yuan worth of property in the first half of the current year, up 72.8 percent year-on-year.
