HK, China shares fall on government property clampdowns

HONG KONG: Shares in Hong Kong and China fell on Thursday, April 22 as government measures to cool surging home prices weighed on property and banking stocks.

Hong Kong's Hang Seng lost 0.7%, with the property sub-index down over 2%, after media reports that the local government had announced fresh steps late on Wednesday, April 21 to curb property speculation, threatening to dent developers' near-term cash flow and profits.

The measures reportedly include extending an increase in stamp duty on transactions of under US$20 million (RM64 million) and steps to make prices more transparent, and follow a flurry of steps announced by Beijing in recent days as it seeks to avert a property bubble.

China's main stock index fell 0.8% by midday, with banks also under pressure as investors feared the new measures would dampen demand for mortgages.

"These are pre-emptive measures on the back of what the Chinese government has been doing recently and property stocks are suffering in reaction," said Ben Kwong at KGI Asia.

The Hang Seng has lost about 4% over the last 10 days after failing to breach its January high of 22,523 in its latest run-up.

"There is a lack of fresh incentives. Maybe renewed speculation about a renminbi appreciation could become an excuse to buy but without any incentives the market is likely to find resistance around the 22,000 mark," Kwong said.

Hong Kong-based developers Sino Land and New World Development were down more than 3% while China Overseas Land, which was scheduled to report earnings later in the day, fell 1.6%.

The Shanghai Composite Index finished the morning at 3,008.2 points, after jumping 1.8% on Wednesday, April 21, the largest percentage gain in three months.

All 14 banks listed on the Shanghai and Shenzhen stock exchanges fell.

ICBC, the world's largest bank by market value, was the most actively traded stock on the Shanghai exchange, falling 2.2%. Minsheng Bank, the second most active counter, fell 3.1%.

The CSI 300 Index, which covers the 300 largest companies by daily turnover and market capitalisation on the Shanghai and Shenzhen stock exchanges, fell 0.6%. -- Reuters