HIBOR Rises, Hong Kong Property Market Lags 4% Behind Hang Seng Index: Favors Tiande Real Estate et al.
Morgan Stanley's research report indicates that after three consecutive months of low HIBOR (below 1.2%), HIBOR has rebounded to above 2% this week. Our company believes this is in line with expectations, and it may maintain a range of 2-3% in the future. As HIBOR rises, we think that Hong Kong property stocks have lagged behind the Hang Seng Index by about 4%, which is a natural response.
Our company believes that this sector will still have resilience in the next month (until mid-September), mainly due to: 1) the policy address on September 17, with market expectations increasing for new policies; and 2) the US interest rate cut. However, looking at it from a 12-month perspective, we believe that Hong Kong's property market (mainly residential and retail) will gradually recover. In the retail sector, we favor Tiande Real Estate (01972), Hang Lung Group (00101), Wharf Real Estate Investment Company (01997), and Link REIT Fund (00823); in the residential sector, we favor Henderson Land Development (00012) and Sun Hung Kai Properties (00083).