In Hong Kong, property development company stocks suffered after building executives met with the territory's Financial Secretary to discuss the high price of land in Hong Kong, where virtually every bit of rocky land is owned by the government and leased to developers. About 70 percent of Hong Kong island is parkland, and the developers are asking the government to make more of it available to them in order to dampen the current price escalation. Sino Land Ltd. (SNLAY) plunged 4.6 percent, New World Development Ltd. (NDVLY), slid 4.3 percent, Cheung Kong Holdings Ltd. (CHEUY) lost 2.7 percent and Sun Hung Kai Properties Ltd. (SUHJY) slipped 1.9 percent.
The price of homes on the island has swelled 28 percent this year, and many worry that foreign speculators are snatching up overpriced luxury flats, pushing out local buyers. The maximum price paid per square foot in Hong Kong has now outpaced prices commanded in London – formerly the home of the most expensive property in the world. Mortgage rates in the territory now stand at their lowest recorded levels, and this week the government instituted new restrictions requiring 40 percent down payments on properties sold for more than HK$20 million ($2.6 million), in the hopes of stemming a possible property bubble.
Hong Kong Casino stocks also took a beating today, as Macau toys with imposing limits on the rapidly expanding industry. Wynn Macau Ltd. slumped 7 percent and Melco International Development Ltd. (MDEVF) plunged 6.3 percent. Galaxy Entertainment Group Ltd. (GXYEY) dropped 3.9 percent and SJM Holdings Ltd. (SJMHF) lost 3.8 percent.
In Japan, the real-estate sector also fared badly with Leopalace21 Corp. (LEOPF) taking the biggest dive, losing 16 percent. The property company now says it expects to lose money this year as a result of low rental income, after earlier predictions that it would turn a profit, according to Bloomberg. Sumitomo Realty & Development Co. Ltd. (SURDF) plunged 3.9 percent and Mitsubishi Estate Co. Ltd. (MITEF) lost 1.9 percent,
Industrial electronics company Tokyo Electron Ltd. (TOELY) plummeted 6 percent and electronic instrument company Advantest Corp. (ATE) lost 5.1 percent, helping drag the Nikkei lower.
In China, an increase in air travelers spurred airlines to post profits for the third quarter, sending China Southern Airlines Co. (ZNH) up 1.7 percent, Air China Ltd. (AICAF) up 1.5 percent and China Eastern Airlines Corp. (CEA) up 0.7 percent. Bloomberg reports that airlines have seen a 20 percent rise in air travel so far this year. Much of it spurred by the financial stimulus package the Chinese government has employed to keep the Dragon's economy at a safe cruising altitude.
