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<Research>JPM Names SWIREPROPERTIES/ HENDERSON LAND/ LINK REIT as Top Picks for HK Developers; More Catalysts Awaiting Ahead
Recommend 20 Positive 28 Negative 25 |
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Since mid-June, Hong Kong property stocks have outpaced the HSI by 8%, according to a research report from JPMorgan. Just yesterday (25th), the sector rose by 3% (compared to a 1% gain in the HSI). The main reasons included: (1) growing market expectations that the US may cut interest rates earlier than anticipated; (2) sector rotation into high-dividend or lagging sectors such as Hong Kong property (in fact, Hong Kong property stocks were still underperforming the HSI by 1% YTD even after the recent rally); (3) The HIBOR has stayed below 1% for nearly two months; (4) a slight increase in southbound capital holdings (rising from 7.2% in early May to 7.6% recently); (5) to a lesser extent, positive news from strong sales absorption rates in recent residential projects, and JP Morgan has also observed increased interest from long-term investors. The broker also pointed out that some stocks (especially SHK PPT (00016.HK)) are already trading at quite high valuations. JPMorgan's top picks in the sector remained SWIREPROPERTIES (01972.HK), HENDERSON LAND (00012.HK), and LINK REIT (00823.HK). Even though these three stocks have already risen 30%, 28%, and 37% respectively YTD, they still offer dividend yields of over 6% and have further catalysts ahead. AAStocks Financial News |
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