Tax delay boosts property shares

PUBLISHED : Friday, 15 February, 2008, 12:00am
UPDATED : Friday, 15 February, 2008, 12:00am

News that it might take two more years before the government could impose a property tax shored up the share prices of mainland property plays yesterday.

Guangzhou R&F Properties advanced as much as 10.53 per cent to HK$25.20 in intraday trading before retreating to close at HK$24.80, up 8.77 per cent from Wednesday.

Agile Property Holdings climbed to an intraday high of HK$11.98 before closing at HK$11.62, up 6.61 per cent.

Also closing with strong gains were Country Garden Holdings, which rose 6.56 per cent to HK$6.82, China Resources Land, 5.05 per cent to HK$15.40, and KWG Property Holding, 3.51 per cent to HK$8.84.

'The sector will definitely benefit from the news,' said Sun Hung Kai Financial strategist Castor Pang Wai-sun.

Quoting an unnamed official, the mainland Guangzhou Daily reported that to name Beijing, Shenzhen, Liaoning, Jiangsu and Tianjin as testing points for the property tax was a 'misunderstanding'.

'It is impossible for the tax to be implemented within the next two years,' the newspaper quoted the official as saying.

Several technical issues, notably, the integration of computer systems among the property, finance and tax departments, would have to be resolved, the report said.

'How can we introduce a property tax if information cannot be shared between these related departments,' the official was quoted as saying.

That mainland property counters had recently been market laggards also helped boost their prices, said Tung Tai Securities associate director Kenny Tang Sing-hing, adding that the stocks had been rising since early this week.

The recent snowstorms also fuelled hopes that the central government would delay the introduction of tougher measures to curb property market expansion.

'It will offer relief to the property sector,' Mr Tang said.

He said major mainland property developers, such as R&F Properties and China Overseas Land & Investment, were expected to lead a rally once overall market sentiment had improved.