STOCKWATCH: Hong Kong properties/financials -- 4

At 11:47 am, the Hang Seng property sub-index was down 863.09 points at 18,384.43. The Hang Seng index was down 431.26 points at 13,763.09. Cheung Kong shed 2.75 hkd to 89.25, Hang Lung lost 0.40 to 7.75, Henderson Land eased 2.40 at 43.40. Sun Hung Kai Properties skidded 4.50 at 78.50, New World Development was 0.80 lower at 12.60. Sino Land shed 0.375 at 4.35 and Hysan Development was down 0.50 at 13.55. Wharf was down 1.80 at 21.20 and Wheelock lost 0.60 at 7.90. Simon Tam, dealing director with Sassoon Securities, said: "It is not a surprise to see sharp declines in property counters after the U.S. stronger-than-expected February unemployment data suggested that the U.S. Federal Reserve might not cut interest rates aggressively in the near term." Tam said profit-taking in the property sector was normal, following the sector's substantial gains accumulated since earlier this year, when the U.S. Fed began to cut interest rates. "Players have been buying aggressively earlier amid interest rate reductions and optimism over the property outlook, following a series of government measures," he said. Earlier, the government said it will relax its anti-speculation measures for the sale of housing units with immediate effect. It is also increasing the quota for private sales of new flats from the current 20 pct to 30 pct. The government said it will auction about 6.22 hectares of land for the year to March 2002, from 16 hectares in the current financial year. Tam said, however, he still expects the U.S. Fed to cut interest rates by 50 basis points when the FOMC meets next week. "The property market will have a fairly stable outlook, with the government's stance on keeping property price steady," Tam said. Among individual stocks, Tam said Sun Hung Kai Properties may continue to see some pressure, with its current price still trading at about a 10 pct premium to its net asset value. "Whilst other second to third liner property shares are trading at around 30-50 pct discount to their NAV, blue chips like SHKP and Henderson will have some selling pressure in the near term," he said.

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