SHK puts drop to lowest since 2011

The cost of bearish options on Sun Hung Kai Properties Ltd fell to the lowest level in more than a year on speculation Hong Kong's biggest developer will boost home sales and weather bribery charges against its chairmen.

Puts protecting against a 10 percent decline in the shares cost 1.04 times more than calls betting on a 10 percent gain, according to data on three-month options compiled by Bloomberg. The price relationship known as skew sank last week to the lowest level since June 2011. The shares rose 13 percent in the eight days through on Tuesday, the longest streak in two years.

Sun Hung Kai Properties Ltd said last week that it will speed up home sales as the company expects low interest rates to offset the impact of increased land supply. The company's shares have rebounded after dropping 13 percent on March 30 as its billionaire co-chairmen, Thomas and Raymond Kwok, were arrested on charges they bribed the city's former No 2 official.

China's local govts keen to sell land

Hang Lung Properties Ltd, the Hong Kong developer investing $8.5 billion on the mainland, is finding local governments on the Chinese mainland more willing to sell land, Chairman Ronnie Chan said.

The value of land transactions in China rose to 96.4 billion yuan ($15 billion) in August, the highest this year, as developers expect home prices to recover after two central bank interest rates cuts in June and July. Prices rose for a third month in August, according to SouFun Holdings Ltd, the nation's biggest real estate website owner.

Chinese developers with improved sales and cash flows are showing renewed interest in land acquisitions. Seven of China's biggest real estate developers by market value, including China Vanke Co, bought land worth 8.9 billion yuan in major cities in the first week of September, China Daily reported last week.

Longfor falls most on share sale

Longfor Properties Co had its biggest drop in 11 months in Hong Kong trading after the Chinese developer said it plans to raise HK$3.07 billion ($396 million) selling shares to investors.

The stock declined fell 8.7 percent to HK$11.78 at the close, the biggest drop since October 2011. The loss cut its gain this year to 34 percent, compared with the 13 percent increase in the Hang Seng Index.

Tycoon ups Hui Xian REIT stake

Cheung Kong Chairman Li Ka-shing increased his holdings in Hui Xian REIT by 9.49 million units on Sept 14, according to a disclosure filing to the Hong Kong stock exchange.

After the purchase, Li's stake in the company increased to 53.09 percent from 52.9 percent.

HK stocks rise on BOJ Stimulus

Hong Kong stocks rose, with the city's benchmark index closing at a four-month high, amid optimism China will introduce measures to support its financial markets. Shares extended gains after the Bank of Japan followed the US in easing monetary policy to spur economic growth.

The Hang Seng Index gained 1.2 percent to close at 20841.91, the highest since May 4. More than three stocks rose for each that fell on the gauge, with trading volume 34 percent above the 30-day average. The Hang Seng China Enterprises Index of mainland companies advanced 1.7 percent to 9849.06.

Futures on the Hang Seng Index rose 1.2 percent to 20,884 on Wednesday. The HSI Volatility Index dropped 2.4 percent to 17.30, indicating traders expect a swing of 5 percent for the equity benchmark in the next 30 days.

Bloomberg

(HK Edition 09/20/2012 page2)