Property developer shares shoot up on CE statement, China reports

Property plays rally after CY Leung's comments on suspension of property planand reports of easing restrictions on mainland homebuyers

PUBLISHED : Thursday, 03 April, 2014, 6:47am
UPDATED : Thursday, 03 April, 2014, 6:48am

Property stocks rose in Hong Kong and on the mainland yesterday after Chief Executive Leung Chun-ying said the "Hong Kong property for Hong Kong people" scheme could be suspended, and following reports that several mainland cities might relax measures designed to curb investment demand.

Shares in Hong Kong developers - led by Wharf and Sun Hung Kai Properties - surged after Leung said the market had cooled following the introduction of two stamp duty measures.

"The market interprets Leung's statement as a sign no more new cooling measures will be rolled out," Bocom International analyst Alfred Lau said.

Lau said the market had seen it as an excuse to lift property stocks, which were trading at big discounts, but the property market would continue to soften because the two toughest measures - double stamp duty and buyer's stamp duty - remained in place.

Strong gains in developer stocks saw the Hang Seng property sub-index rise 3.67 per cent yesterday, the biggest increase since January 2012. The broader Hang Seng Index rose 0.34 per cent.

Shares in Wharf climbed 4.3 per cent to HK$54.10, SHKP gained 4.06 per cent to HK$99.75, Cheung Kong rose 3.29 per cent to HK$134.90, Henderson Land Development jumped 3.18 per cent to HK$46.95 and New World Development added 3.27 per cent to HK$8.20.

Hong Kong-listed mainland developers also rose on speculation that governments could ease home purchase restrictions in mainland cities where prices have dropped sharply because of oversupply problems.

The rally was sparked by a Shanghai Securities Journal report about the possible relaxation of restrictions on home ownership and mortgage lending for second homes bought in Hangzhou and Changsha.

The call for a review of the four-year-old ban on people buying more than two homes came after Hangzhou's stock of unsold units rose to 120,000 - the highest on the mainland.

Gemdale PPT shot up 13.73 per cent to 58 HK cents, Hopson climbed 11.63 per cent to HK$8.25, Country Garden rose 8.43 per cent to HK$3.73 and Greentown increased 9.65 per cent to HK$9.77.

Home prices in 100 mainland cities monitored by China Index Academy registered month-on-month growth of 0.35 per cent last month, to an average of 11,002 yuan (HK$13,826) per square metre. The average year-on-year increase was 10 per cent.

Developers have offered projects at discounts or provided buyers with second mortgages to encourage interest. Discounts have been seen in Beijing, Changzhou and Hangzhou, while Poly Property provided second mortgages in Guangzhou.