October 11, 2017 / 8:36 AM / a year ago

Hong Kong stocks fall as city chief's property, tax measures disappoint

Oct 11 (Reuters) - Hong Kong stocks fell on Wednesday, pressured by a sharp reversal in property shares after the city’s chief executive unveiled a mix of housing and tax relief policies that disappointed some investors.

The Hang Seng index fell 0.4 percent to 28,389.57 points, while the China Enterprises Index lost 0.1 percent, to 11,411.41 points.

In her maiden policy speech, Carrie Lam on Wednesday warned the city faced “grave” challenges and must develop a diversified and high value economy.

She pledged to increase land supply where possible and launch a new subsidised “starter homes” scheme to help families not eligible for cheap-rental public housing.

But property shares gave up initial gains, and closed the session down 1.8 percent, as some observers felt 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 in the tiny territory 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.

Materials shares also weighed, dropping 1.8 percent. (Reporting by the Shanghai Newsroom; Editing by Kim Coghill)

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