Hong Kong stocks fell yesterday, pressured by a sharp reversal in property shares after the chief executive unveiled a mix of housing and tax relief policies that disappointed some investors.
Yet, shares of Great Wall Motor (2333) rose 14 percent on news that it will have a joint venture with German luxury automaker BMW, although the mainland company said it is unable to confirm the news.
The Hang Seng index fell 0.4 percent to 28,389 points, while the China Enterprises Index lost 0.1 percent, to 11,411.
Property shares gave up initial gains, and closed the session down 1.8 percent, as some observers felt Chief Executive Carrie Lam's housing initiatives were not bold enough.
In particular, some investors had bet Lam would announce details of how she plans to free up more land for development.
"Property shares are down because of the lack of mention of farmland conversion to build first homes. But the chief executive cannot be too specific, so the sell-off doesn't reflect the real picture," said Nicole Wong, a property analyst with CLSA.
Shares of Henderson Land (0012) fell 4.9 percent and Sun Hung Kai Properties (0016) was down 1.7 percent. Shares of CK Asset (1113) dropped 1.3 percent, and New World Development (0017) fell 1.0 percent.
"Some investors decided to take profits yesterday," said Linus Yip Sheung-chi, chief strategist at First Shanghai Securities. "The property shares dropped yesterday as there wasn't any breakthrough news from the policy address with regards to housing policies."
Meanwhile, it was reported that Great Wall Motor and BMW are considering the possibility of opening an assembly plant in the eastern city of Changshu, a BMW executive said, while declining to say what type of vehicles would be put together there.
A venture with Great Wall would be BMW's second in China. It has a joint venture with local carmaker Brilliance China Automotive (1114). Foreign carmakers have to operate in the market with local partners.