Hong Kong stocks saw mainland property developers decline collectively. As of press time, R&F Properties (02777) fell 4.89% to HK$0.175; C&D Intl Group (01908) dropped 3.63% to HK$13; China Overseas (00688) declined 2.95% to HK$12.5; and Sunac (01918) slipped 1.22% to HK$0.405.

On the news front, Daiwa released a research report stating that the contraction in China's real estate market sales widened in October. The contracted sales of the top 100 developers, measured by gross floor area and by value, fell 22% and 17% year-on-year respectively, further deteriorating from declines of 8% and 14% year-on-year in September, though roughly flat on a month-on-month basis. The firm maintained a neutral view on the sector's short-term share price performance and continued to prefer leading state-owned enterprises.

The brokerage believes the drag from the pre-sale reform introduced on August 28 has only just begun. The continuously widening year-on-year sales declines partly reflect developers slowing construction and project launches to preserve cash flow, and the current decline only reflects a small portion of the reform's ultimate impact. Daiwa believes the latest data does not yet fully reflect the impact of the pre-sale reform, and does not expect short-term relief measures to be sufficient to offset the drag; however, the roughly 20% share price correction since September has partially priced in related factors.