Property stocks down as central bank announces new measures
June 28, 2014, 12:03 am TWN
TAIPEI -- Shares in local property developers came under pressure Friday morning after the central bank announced measures a day earlier to further tighten its control on the local housing market in a bid to cap skyrocketing prices, dealers said.
Losses were limited however as the valuation of the local construction sector appeared relatively low compared with the bellwether electronics sector and even the broader market, they said.
The construction sub-index fell 0.65 percent after the central bank announced new measures to cap the loan-to-value (LTV) ratio — the percentage of a home's value that a bank is allowed to loan to a property buyer.
Huaku Leads the Fall
Among the falling property stocks, Huaku Development Co. (華固建設) shed 1.10 percent to close at NT$72.00, Highwealth Construction Corp. (興富發建設) fell 0.75 percent to end at NT$66.40, and Huang Hsiang Construction Corp. (皇翔建設) lost 0.65 percent to close at NT$46.00.
The weighted index on the Taiwan Stock Exchange ended down 14.11 points, or 0.15 percent, at 9,306.83, after moving between 9,303.57 and 9,330.95, on turnover of NT$93.59 billion (US$3.23 billion).
"Almost every major newspaper placed the central bank's new tightening measures on their front pages today. It was no surprise that the construction sector faced selling soon after the local bourse opened," Grand Fortune Securities analyst Chen Wei-tai said.
In the latest quarterly policymaking meeting, the central bank announced the new measures to cap the loan-to-value (LTV) ratio.