... or by folks sending asset prices down in anticipation of a massive currency devaluation. Either and every which way, the job of getting the pie smaller will be done, so that we can move on, leaving the dead and wounded behind, in harsh Darwinian logic.
biz.scmp.com
Tuesday, September 17, 2002
Property stocks hammered over price war fears
DAVID WILDER, JON OGDEN and SOPHIA WONG
Property stocks were hammered yesterday as fears of a new flat price war and poor weekend sales saw investors unleash a fresh wave of selling.
The sharp declines were also linked to short-term interest rate rises and renewed question marks over Hong Kong's fixed exchange rate system in light of the deepening domestic economic gloom.
Telecoms stocks also took a pounding, with PCCW falling to a new closing low of HK$1.14, and dragging the Hang Seng Index 145.84 points or 1.51 per cent lower to 9,505.13.
"My gut feeling is to look at the newspapers - it's all negative news," said Eric Yuen, deputy research head at Dao Heng Securities.
The benchmark has now fallen 16.6 per cent this year as investors lose hope that the SAR can escape its deflationary spiral.
Renewed losses in the property sector were triggered by a host of reports suggesting that the shoots of recovery seen earlier in the year were illusory.
Property stocks fell sharply after disappointing sales at HKR International's Discovery Bay development over the weekend, despite a company claim that flats were priced at 10 per cent below the market.
"The outlook is still fairly gloomy in the property sector and people are still thinking about their investments [in it]," said Peter Chau Ming-tak, a fund manager at TAL CEF Global Asset Management.
Leading developers Sun Hung Kai Properties and Henderson Land fell 4.58 per cent and 3.89 per cent respectively while Cheung Kong, hurt also by its telecoms exposure to Hutchison Whampoa, lost 2.76 per cent.
Last week, developers intensified preferential offers to grab buyers. Kerry Properties discounted the price of some of its remaining units at Constellation Cove in Tai Po by 15 to 18 per cent.
Cheung Kong (Holdings) offered a preferential package, equivalent to a 5 per cent price discount, to lure buyers with a monthly family income in excess of HK$23,000 to Hampton Place in Tai Kok Tsui.
On Friday, HKR International announced the launch of 18 units at Siena phase two in Discovery Bay for sale at 10 per cent below secondary market price.
Sun Hung Kai Properties responded by releasing additional flats at Aegean Coast in Tuen Mun at prices 10 per cent cheaper than the first batch of units.
Analysts said that the latest disappointing sales had deepened the gloom in the sector despite flat prices already coming off 60 per cent from their peak in 1997.
"Look what's happening, it's quite dramatic. They are all cutting prices quite significantly," said John Mytton, a fund manager with Global Asset Management. "Even if you bought property six months ago you are looking at a 20 per cent decline. We felt that much of the bad news was in the price but that was predicated on demand meeting supply."
Hong Kong's telecoms stocks skidded to fresh yearly lows yesterday as investors digested the impact of Friday's news that France Telecom reported a 12 billion euro (about HK$91.13 billion) loss and was pulling out of MobilCom, its German mobile partner.
Fixed-line operator PCCW lost 4.2 per cent to close at a new post-Hongkong Telecom merger low of HK$1.14, while Hutchison Whampoa, a major investor in the European telecoms market, plunged 4.78 per cent to HK$48.80. |
