Property stocks in Hong Kong plunged yesterday, as investors took profits following Shimao Property Holdings' share placement and a looming price war in Hong Kong. Shares of Shimao tumbled 12.73 per cent to close at HK$6.72 after the developer raised a net HK$1.93 billion from the placement by setting the price at HK$6.95 a share. Guangzhou R&F Properties dropped 6.66 per cent to HK$10.38 and Country Garden Holdings declined 5.02 per cent to HK$2.27. Despite disclosing a 43.1 per cent increase in property sales in March to HK$6.06 billion yesterday, China Overseas Land & Investment dropped 4.01 per cent to HK$12.46. Cheung Kong (Holdings) dipped 5.45 per cent to HK$71.95 after it released phase two of the Central Park Towers development in Tin Shui Wai at more than 10 per cent below secondary market prices. The discount lured potential buyers away from New World Development's Emerald Green in Yuen Long, which sold only five units yesterday after selling 150 units on Tuesday. New World slipped 4.22 per cent to HK$8.85. 'Property stocks have surged 40 per cent to 50 per cent since early March. It's not surprising to see investors take profit,' said Li Kwok-suen, a fund manager at Phillip Capital Management, adding that the correction would last for days. Matthew Kwok, the head of research at Tanrich Financial Holdings, said investors sold down property stocks on concerns falling home prices had not yet ended. 'Poor performance in stock markets throughout the region also affect investors' mood,' he said. However, bucking the trend was Kowloon Development which gained as much as 16.18 per cent before closing 12.06 per cent up at HK$3.81, a three-month high. 'The jump is basically driven by the declaration of dividend despite the significant loss in 2008,' said Francis Lun Sheung-nim, the general manager at Fulbright Securities. Kowloon Development reported an underlying loss of HK$2.58 billion for last year, compared with HK$1.5 billion profit in 2007, because of losses from stocks and forward contracts. Still, the company declared a final dividend of 20 HK cents per share. Polytec Asset Holding, a subsidiary of Kowloon Development, which reported a net loss of HK$527.55 million for 2008 but declared a final divided of 1.2 HK cents per share, saw its shares jump 10.26 per cent to close at 43 HK cents.