October 4, 2016 / 5:06 AM / 2 years ago

Hong Kong stocks flat, Evergrande jumps on backdoor listing plan

HONG KONG, Oct 4 (Reuters) - Hong Kong stocks were flat on Tuesday as investors took profits following a rally led by China Evergrande after its backdoor listing plan, and they also squared positions in case mainland authorities take fresh steps to cool China’s property prices.

The benchmark Hang Seng Index edged up 0.02 percent at 23,590.00 points by lunch break, while China Enterprises Index gained 0.4 percent to 9,719.54 points.

China Evergrande jumped as much as 12 percent to their highest since Aug. 19 after its plans to inject almost all of its property assets into a Shenzhen-listed firm, orchestrating a backdoor listing in the mainland that could potentially fetch it a higher valuation.

Investors were reluctant to leave positions exposed with mainland share markets closed for a week-long national holiday.

“Without the China market, players were hestitated to take major positions, but still the underlying tone is still firm,” said Steven Leung, a director at UOB Kay Hian.

Concern over further property measures to cool the mainland property market triggered selling.

Shares of China Resources Land fell 2.6 percent and China Overseas Land slid 1.6 percent.

Four Chinese cities have announced new restrictions on property purchases as the government tries to cool soaring home prices stoked by property speculators in second- and third-tier cities across the country. (Reporting by Donny Kwok; Editing by Simon Cameron-Moore)

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