By WSJ Staff
By Robert Li
Midland Holdings shares have fallen as much as 15% today after the Hong Kong government announced?anti-property-speculation measures Friday. The moves, which include additional stamp duties for properties sold within two years of purchase and lower mortgage ratios, are expected to hurt real estate agents as transaction volme falls.
Midland, Hong Kong’s only listed real estate agent, saw its shares down 15.6% in mid-day to 6.63 Hong Kong dollars.
“The new measures could immediately dampen the frenzy sentiment,” 3V Research says, adding that transaction volume could fall as much as 15%-20% in the short term.
Following the drop, Daiwa cut Midland to underperform from outperform, placing its six-month target price at HK$6.40 from HK$7.93. The firm said the Hong Kong’s govermnent’s latest measures indicate that it is determined to remove speculative demand from the market and prevent banks from excessive mortgage lending.
Trading volume was heavy at HK$71.8 million in the first 10 minutes of trade, compared with HK$51.4 million for all of Friday.
Other real estate companies were also being affected by the announcement. SHK Properties, Hong Kong’s largest property developer by market capitalization, was down 8.3% at HK$123, followed by Henderson Land, down 6.6% at HK$53, Sino Land, off 5% at HK$15.50, and Cheung Kong, 2.8% lower at HK$117.20.
“The government finally came out with some ‘real’ measures,” which were harsher than what the market expected, says Credit Suisse, adding that it predicts Hong Kong property prices and transaction volumes will drop 5% and 40%, respectively, in the near term.
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