Developers Gain on Citigroup Election Report: Hong Kong Mover
Hong Kong developers, led by New World Development Co., rose in Hong Kong trading after Citigroup Inc. said Chief Executive Elect Leung Chun-ying will probably continue the current administration’s housing policy.
New World, led by billionaire Cheng Yu-tung, rose 3.8 percent to HK$9.26 at the 4 p.m. close in Hong Kong. Cheung Kong Holdings Ltd. (1), the builder controlled by Li Ka-shing, Hong Kong’s richest man, advanced 2.4 percent, while Sun Hung Kai Properties Ltd. (16), the city’s biggest developer, climbed 2 percent.
Leung, a former property surveyor, yesterday won the election to be Hong Kong’s next chief executive, after getting about 60 percent of the vote from a 1,193-member panel of the city’s billionaires, academics and professionals. Leung, who has pledged to bridge the income gap and bring down housing prices, didn’t originally have the backing of the mainstream business community with Li and most of the city’s other billionaires choosing to nominate his rival for the position.
“We reiterate our views that general property prices will not fall substantially on the simple theme of Leung taking office,” Adrienne Lui, a Hong Kong-based analyst at Citigroup, wrote in a report dated today. “His detailed proposed land and housing policies do not differ significantly from what the current administration is pursuing.”
Hong Kong’s home prices have risen more than 70 percent between early 2009 and the middle of last year, drawing protests that housing has become unaffordable for the general public. Transactions and prices began slowing down after mortgage rates increased and the government stepped up measures to curb the real estate market.
The Hang Seng Property Index (HSP), which tracks the city’s seven biggest developers, gained 1.7 percent, the most since Feb. 28.
Hang Lung Properties Ltd. (101), whose chairman Ronnie Chan has been one of the most vocal supporters of Leung since he announced his candidacy last year, rose 0.7 percent. Sino Land Co., the developer controlled by Singapore billionaire Robert Ng, advanced 4 percent.
Henry Cheng, New World’s chairman and the son of Cheng Yu- tung, yesterday told reporters he voted for Leung, after having nominated Henry Tang, Leung’s main rival in the election, in February.
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