Hong Kong property stock gloom seen deepening in options market

Hong Kong

AS Hong Kong property prices slump with real estate stocks, investors are looking to the options market for protection.

Traders paid the most in four years in January to hedge against losses on Sun Hung Kai Properties Ltd versus the cost of bullish bets, according to data compiled by Bloomberg. A similar pattern emerged in options on Wharf Holdings Ltd. A measure of the city's property stocks is down 33 per cent in the past year, with losses accelerating in January as the Hong Kong dollar weakened and real estate sales fell to the lowest in at least 25 years.

"Pressure on share prices in the sector will persist," said Alfred Lau, a…