Midland Falls on Realtors’ Branch Closure Worry: Hong Kong Mover
Midland Holdings Ltd. (1200), the biggest realtor listed in Hong Kong, headed for its biggest decline in more than four months after saying the city’s property brokers may close as many as one third of their branches.
Midland fell as much as 5.1 percent to HK$3.34 and traded at HK$3.35 as of 10:38 a.m. in Hong Kong. The stock headed for its biggest drop since Oct. 29. The shares have lost 9.5 percent this year, compared with a 2.5 percent decline in the benchmark Hang Seng Index.
Hong Kong’s property brokers may cut as many as a third of their branches and agents if government curbs on home prices continue, the company’s chief analyst Buggle Lau said in an interview yesterday. The city’s government has imposed a raft of measures including a tax on foreign buyers and higher mortgage down payment requirement in the past six months to contain prices that have doubled since early 2009.
Midland had its rating cut to sell from neutral by Bocom International Holdings Co. analyst Alfred Lau. Overall property transaction volume will decelerate because of government measures, Lau said in a note to clients today.
Only one transaction of existing homes was recorded in 10 of Hong Kong’s biggest private residential development tracked by Centaline Property Agency Ltd. over the weekend of March 16 and 17, the realtor said.
About 12,000 agents could lose their jobs, said Lau. The comments were first made by Midland Deputy Chairman Angela Wong at a March 15 briefing, according to local media including the South China Morning Post.
Midland on March 15 reported 2012 net income nearly doubled to HK$250 million ($32 million) on higher commission fees.
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