(Updates to midday)
* HSI flat, CSI300 down 1.6 pct
* China property hit by rumours of more sector curbs
* HK property mixed after curbs on housing loans announced
By Clement Tan
HONG KONG, Sept 17 (Reuters) - Mainland Chinese markets are
set for their worst loss in three weeks on Monday with the
property sector a key drag, dampened by worries of more curbs
which will crimp sales during the traditional peak season in
late September and October.
Onshore weakness extended to offshore markets in Hong Kong,
keeping the Hang Seng Index flat at midday with the
benchmark index hovering at four-month highs it reached last
The CSI300 Index of the top Shanghai and Shenzhen
listings went into the lunch break down 1.6 percent, while the
Shanghai Composite Index was down 1.3 percent. Both
indices are now set for their worst losses since Aug. 27.
"In this jittery market, any headlines on such a key sector
are bound to trigger a reaction," said Hong Hao, chief
strategist at Bank of Communications International Securities.
Two of the biggest property developers listed in the
mainland saw steep losses. Shenzhen-listed China Vanke
lost 3.8 percent, while Shanghai-listed Poly Real
Estate dived 5.8 percent.
In Hong Kong, China Overseas Land & Invesment shed
2.3 percent, while China Resources Land slumped 4.6
percent partly after media reports suggested the company may buy
property from its parent.
A trader at a top Chinese brokerage said the sector was also
hit by rumours of an extension of property taxes in the
This comes after state-run media reported last Friday that
regulators were watching overly high prices in government land
sales. Premium rates and opening prices at land sales and speed
of housing development are amongst the factors scrutinised to
avoid land hoarding by real estate developers.
Other Chinese local media reported over the weekend that a
developer sold new apartments in Beijing at a much higher price
that were built on prime land intended for subsidised housing it
had obtained at a low price.
Chinese property stocks have been declining steadily since
official data in July showed housing prices increasing for the
first time in nine months. This carried into August, with the
next housing price data expected on Sept 18.
By contrast, Hong Kong property developers were mixed
despite moves by its de facto central bank to curb home loans to
prevent the city being flooded with money from the U.S. Federal
Reserve's latest stimulus plan.
Sun Hung Kai Properties climbed 1.2 percent and
Cheung Kong Holdings edged up 0.5 percent, but Sino
Land lost 1.8 percent and Henderson Land
slipped 0.7 percent.
In a report dated Sept. 14, Citi said it did not expect home
prices in Hong Kong to see any major decline of more than 5
percent from current levels as a result of the U.S. Federal
Reserve's third round of quantitative easing.
"We believe the announced measures are strong enough to
contain the home price rally for 3-6 months...but we think
longer term, this announcement removes policy risk overhangs and
see a likely attractive opportunity to accumulate...on expected
weakness," Citi analyst Ken Yeung said in the same note.
(Additional reporting by Chen Yixin in SHANGHAI; Editing by