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Hong Kong property agents won't accept China UnionPay cards

People & Companies / Latest News

Australia

Mar 26 2017

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Moxy Yin and Molly Wei, Bloomberg

Banks are asking Hong Kong property agents to stop accepting China-issued UnionPay cards, as mainland authorities escalate their crackdown on capital flows out of the country.

Ricacorp Properties Ltd. won’t accept China-issued UnionPay cards for home purchases starting Friday after it received a verbal notice from banks, said a spokesman. Centaline Property Agency also implemented the new rule, according to people familiar with the matter, who asked not to be named because they aren’t authorized to speak to media.

China has clamped down on capital flight out of the mainland as it seeks to stabilize its currency, tightening rules on everything from overseas insurance purchases to corporate dealmaking. In Hong Kong, a rush of demand from Chinese buyers has driven home prices to record highs.

An index of Hong Kong’s property stocks fell 0.7 percent as of 1:54 p.m. local time on Friday, making it the biggest drag on the Hang Seng Index. Sun Hung Kai Properties Ltd. declined as much as 2.3 percent, the biggest intraday slide in three months, as New World Development Co. dropped 1.6 percent.

Some Chinese buyers transfer money using UnionPay cards to Hong Kong property agents, who help them get cashier’s orders from banks to subscribe for new units, people familiar with the matter said. Cashier’s orders are also used for putting down a portion of the home deposit, the people said.

UnionPay International has started an investigation on suspicious cross-border transactions, company said in a statement, reiterating that it bans overseas home purchases with its cards. A Centaline spokesman declined to comment.

SOURCE: Bloomberg

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