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June 12, 2011, 9:13 p.m. EDT

Hong Kong property shares may drop on new rules

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By Michael Kitchen

LOS ANGELES (MarketWatch) -- Hong Kong property shares could come under pressure Monday, after the territory's de fact central bank tightened rules for mortgages Friday in order to cool the real-estate market. In its latest tightening move in the sector, the Hong Kong Monetary Authority told banks to limit mortgages on residential properties worth more than 10 million Hong Kong dollars ($1.3 million) to 50% of the total value, down from a previous threshhold of HK$12 million. A 60% mortgage limit will apply to properties worth HK$7 million to HK$10 million, down from a previous bracket of HK$8 million to HK$12 million.

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