China property: rumors on supportive policy package proposed by Ministry of Housing
According to the media, Ministry of Housing and Urban-Rural Development has submitted a package of loosening initiatives on property policies to State Council, and the related policy could be released as early as next month. The possible relaxation on property sector could include lowering the down payment ratio of second property purchase, reducing the property tax and extending the maturity of mortgages.
As we pointed out before, supportive measures introduced by local governments, sluggish property sales and rising downside risk of Chin economy put pressure on Central Government to change its tightening stance on property sector. The property sector stocks have fallen by more than 80% from the peak in 2007 and are trading at around 60-70% discount to NAV. We believe the stock sell-off are overdone, and the potential supportive measures issued by Central Government will improve the market sentiment. We see values in quality names, i.e. China Overseas Land (COLI) and China Resources Land (CRL), while Guangzhou R&F and Shimao would be stock picks for bolder investors.
Regards,
Johnson Hu Research Analyst UOB Kayhian, Shanghai Tel: (8621) 5404 7225 ext 806 Fax:(8621) 5404 7336 Email: johnson.hu@uobkayhian.com
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China property: rumors on supportive policy package proposed by Ministry of Housing
According to the media, Ministry of Housing and Urban-Rural Development has submitted a package of loosening initiatives on property policies to State Council, and the related policy could be released as early as next month. The possible relaxation on property sector could include lowering the down payment ratio of second property purchase, reducing the property tax and extending the maturity of mortgages.
As we pointed out before, supportive measures introduced by local governments, sluggish property sales and rising downside risk of Chin economy put pressure on Central Government to change its tightening stance on property sector. The property sector stocks have fallen by more than 80% from the peak in 2007 and are trading at around 60-70% discount to NAV. We believe the stock sell-off are overdone, and the potential supportive measures issued by Central Government will improve the market sentiment. We see values in quality names, i.e. China Overseas Land (COLI) and China Resources Land (CRL), while Guangzhou R&F and Shimao would be stock picks for bolder investors.
Regards,
Johnson Hu
Research Analyst
UOB Kayhian, Shanghai
Tel: (8621) 5404 7225 ext 806
Fax:(8621) 5404 7336
Email: johnson.hu@uobkayhian.com
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