Tax puts wrinkle in Prada shares
Local investors in the Hong Kong-listed fashion house could be hit with Italian government's proposed levy on financial transactions
Shares in Hong Kong-listed fashion house Prada fell 3.4 per cent to close at HK$76 on Friday amid concerns that investors trading the stock might have to pay a new Italian government tax from next month.
But some analysts and brokers shrugged off the impact of the tax on the stock.
The investor sell-off was triggered by a company filing that the Italian government had put a draft of a new financial transactions tax up for consultation.
If approved, the tax will apply from March 1 to all companies resident in Italy at a rate of 0.22 per cent of the transaction amount of the companies' securities and financial instruments. The rate will be cut to 0.2 per cent from 2014.
"This tax is unlikely to be an important factor considered by investors when they trade the stock," Core Pacific-Yamaichi Securities analyst Castor Pang said.
"Compared to some low-priced stocks, there's much less intraday trading for Prada's stock. The majority of Prada's investors tend to hold the shares for a mid-term to long period in the expectation of a bigger gain."