Hang Seng ends 1.4pc lower on sharp declines by property developers
China Evergrande down 8.8pc; Sunac China down 7.5pc; China Vanke down 8.0pc, as Chongqing and provincial capital cities announce more market-cooling measures. The Hang Seng property index slumps 2.49pc, its biggest loss since November 2016
Hong Kong stocks fell on Monday as property developers dropped after eight large Chinese cities imposed more restrictions on home resales, in an effort to rein in home prices.
The Hang Seng Index slid 1.4 per cent, or 380.19 points, to 27,500.34, lowest since September 6, and extending a 0.8 per cent slide last Friday after S&P Global Ratings downgraded the city and China’s credit ratings in two separate moves. The Hang Seng China Enterprises Index, or the H-share gauge, lost 1.8 per cent to 10,912.46. Mainland equities also fell.
The Hang Seng property index slumped 2.49 per cent, its biggest loss since November 2016 after Chongqing and provincial capital cities including Changsha and Shijiazhuang announced market cooling measures last week that include restrictions on home flipping by banning the resale of properties from periods ranging between two to five years.
The uptrend on Chinese developers will very probably be reversed here
Shenwan Hongyuan lowered its recommendation on the property sector to underweight and Jingxi Investment Management said the tightening measures may end a rally on the Hang Seng property gauge that rose 33 per cent through Friday this year.
“The measures will definitely put lots of potential buyers on the sidelines and affect developers’ sales,” said Wang Zheng, Jingxi’s Shanghai-based chief investment officer. “The uptrend on Chinese developers will very probably be reversed here.”
China Evergrande tumbled 8.8 per cent to HK$26.9 and Sunac China shed 7.5 per cent to HK$32.00. The two stocks have jumped at least fivefold this year. Beijing Capital Land retreated 10.4 per cent to HK$4.24. China Vanke slid 8.0 per cent to HK$24.8.
