〈The Shanghai times, Dec.16, 2011〉EXECUTIVES of Chinese developers including Shimao Property Holdings Ltd and Glorious Property Holdings Ltd are buying the most stock in their companies since at least 2008, betting the government will ease curbs on the property market that had depressed the shares.

Shimao's billionaire chairman Xu Rongmao, also known as Hui Wing Mau in Cantonese, bought 11 million shares in November, bringing the total this year to 82 million, the most since 2008, according to data compiled by Bloomberg News.

Glorious chairman Zhang Zhirong, with a US$5.4 billion net worth according to Forbes, purchased a record 119 million shares through 11 transactions, mostly in September, the data show.

Glorious, Shimao and KWG Property Holdings Ltd, whose executives also have been buying stock, lost half their values in 2011 as the government tightened mortgage requirements and introduced limits on properties owned to prevent an asset bubble. China this month cut the amount of cash banks must set aside as reserves for the first time in three years to prevent a bubble.

"These share purchases are sending a signal to the market that the government may gradually loosen its policies, whether or not those executives have inside information," said Johnson Hu, a Hong Kong-based property analyst of CIMB-GK Securities Research. "The lower reserve ratio, while not directly intended for the property sector, will actually indirectly benefit the real estate market."

China will maintain a "prudent" monetary policy and a "proactive" fiscal policy next year, the official Xinhua news agency reported last Sarturday, citing a meeting of the Communist Party's Politburo chaired by President Hu Jintao. Data on December 9 showed industrial-production growth weakening and inflation moderating.

The Hang Seng Composite Property & Construction Index, which includes Shimao and Glorious, trades at less than 0.8 times book value, compared with a multiple of as high as 1.4 in the fourth quarter last year, according to Bloomberg News data.

The 13.4 million shares Shimao's Xu purchased on September 2 was the biggest amount in at least two years, the data show. The Shanghai-based developer of mostly high-end homes and hotels traded at a record low 0.54 times book value on October 3, almost a third of its valuation at the start of the year, according to the data.

"Mr Hui is always very confident in his company and the main reason for the recent share buyback is the price is at a low and attractive level," said Tammy Tam, a Shimao spokeswoman.

Xu spent HK$689 million (US$89 million) on his company's stock this year, while Zhang from Glorious paid HK$154 million, based on the closing prices on the purchase date of the shares.

Top executives at Guangzhou-based luxury home developer KWG, commercial real estate builder Powerlong Real Estate Holdings Ltd and CC Land Holdings Ltd, whose properties are mainly in western China, also increased share purchases this year, according to data on Hong Kong-traded mainland developers.

"The company is operating well, but share prices were just too low," said Eva Chan, a spokeswoman at CC Land, whose deputy chairman Peter Lam made his first stock purchase in the company in at least two years. "When Mr Lam bought the shares, he was actually buying at a 70 percent discount to book value. It was a great deal."

〈The Standard, Dec.15, 2011〉This winter could be particularly bleak for a lot of local realty agents. Centaline Property Agency and Midland Realty - the two leading real estate companies - are rumored to have cut staff, mainly due to the current market downturn.

Midland has reportedly already axed as many as 500 frontline staff. Management at both firms deny the rumors, but admit that business has been heavily impacted by the lackluster market.

"We do not have any plans to cut jobs for now,'' said Louis Chan Wing-kit, Centaline's managing director for residential sales.

"But for the 500 agents whose transactions are lower than HK$30,000 per month, we will start giving out warning letters to this batch next month. The batch would be the largest since the financial tsunami in 2008.''

Chan blames the Special Stamp Duty for the market woes. "Secondary home sales have always comprised around 70 percent of the firm's turnover. Transactions dried up after the implementation of the duty. If the situation continues, we will find it difficult to feed all of our agents.''

Centaline, which employs 3,600 agents, has halted expansion plans.

The government implemented the Special Stamp Duty in November last year. Homeowners who resell their properties within 24 months of purchase are subject to a levy of 5 to 15 percent of the resale transaction amount.

Ricacorp Properties, sister agency of Centaline, has also stopped expansion. "Some of our staff have not reached their sales targets. We may ask them to leave if the condition continues, but we would not impose any layoffs,'' said Ricacorp executive director Willy Liu Wai-keung.

Albert Wong Kam-hong, vice chairman of Midland Realty, said his firm also has no plans to reduce staff, but he "would not rule out any possibilities.'' It employs 2,580 realty agents.

"The special levy has not only expelled all of the short-term investors, medium- and long-term investors are also staying away from the market now. Our industry is even worse than our down times in 2003,'' Wong said.

When Hong Kong was hit by SARS during the first half of 2003, housing transactions totaled only 19,000, on volume of HK$27.6 billion. Lawrence Poon Wing-cheung, a specialist in real estate development at City University of Hong Kong, said layoffs could be just a start.

"Commissions are the main source of income for almost all agencies. Global economic uncertainties have not been cleared, which erodes the confidence of many potential homebuyers,'' Poon said. "If transactions remain low, commissions too will be small. Then the firms can only cut costs, that is, cutting headcount and closing branches.''

According to Midland, four out of 10 benchmark residential projects recorded zero transactions over the past weekend. Altogether, the 10 projects totaled 10 sales at the weekend - unchanged from the week before. In fact, secondary market transactions have declined sharply since July, to as low as 5,000 per month. In November, the figure even plunged to 4,795, compared with 13,189 a year ago.

The situation is worse among some smaller firms. In September, Kingswood Property shut down all of its six branches. Soon after, an even smaller outfit, Richway Properties, closed its doors.

Secretary for Housing and Transport Eva Cheng Yu-wah last Thursday said the government could review the SSD before it reaches the two-year mark. Instantly, shares of Midland Realty rebounded 9 percent that day.

However, hopes were quickly shattered by Chief Executive Donald Tsang Yam-kuen the following day, when he reiterated the government's will to curb speculative activities.

"Even if it does happen, it's only a review. I don't think it implies any concrete changes to the policy,'' said Charles Chan Chiu-kwok, managing director of Savills Valuation and Professional Services in Greater China.

Chan said if there is indeed any policy change, it will be loosening of mortgage loans from banks.

〈The Standard, Dec.14, 2011〉Financial Secretary John Tsang Chun-wah said property cooling measures are staying in place, reflecting a shift from the government's more accommodating stance a week ago.

``The Hong Kong Monetary Authority has set out a series of measures to cool the property market and to prevent loans from growing too quickly, and these measures will continue,`` Tsang told a forum yesterday.