CITIC stock in 'fair reaction'
THE performance of CITIC Pacific stock yesterday was a ''fair reaction'' to its acquisition of two Crown land lots for $1.17 billion at Tuesday's government land auction, property analysts say.
The stock took a beating in the first hour of trading, with the share price falling more than three per cent to the day's low of $22.60.
But buying interest returned in the late-morning session, pushing the price back to $23.
It finished at $23.20, down 15 cents on turnover of $80.32 million as 3.49 million shares changed hands.
Carl Lung, property analyst at W I Carr Far East, said share movement was a ''fair reaction'' to the company's acquisitions.
The acquisitions were not a ''bad buy'', as the price was quite cheap, said Mr Lung.
But he said the deals were not very attractive.
Taking into the securities house's prediction that home prices would see a further drop of 20 per cent in next 12 months, profitability was limited.
CITIC Pacific managing director Henry Fan said earlier that the total investment cost for the Tai Po residential site and the Kwai Chung godown site would be $1.5 billion and $6 billion respectively.
Selling price for the residential project would be between $6,000 per square foot and $7,000 per sq ft, which is a bit higher than the current price in the second-hand market.