Understanding the Market | Property stocks continue to plummet, the real estate market shows signs of stabilizing, Morgan Stanley believes that Hong Kong's property sector will face a healthy correction in the short term
Real estate stocks continue to plummet, with CHINA VANKE down 20.29%, SEAZEN down 15.02%, R&F PROPERTIES down 16.39%, and Sunac China down 15.59%. The Central Political Bureau meeting emphasized promoting the stabilization of the real estate market. CITIC Securities believes that the policies are beginning to show results, and market transaction conditions are improving. Morgan Stanley pointed out that Hong Kong real estate, consumer, and financial stocks may face a healthy correction, reflecting market expectations for fiscal stimulus policies, but may be overly optimistic in the short term
According to the financial news app Zhitong Finance, real estate stocks continue to plummet. As of the time of publication, China Vanke (02202) fell by 20.29% to HKD 8.73; Seazen (01030) fell by 15.02% to HKD 2.66; R&F Properties (02777) fell by 16.39% to HKD 1.99; Sunac China (01918) fell by 15.59% to HKD 3.14.
On the news front, a recent meeting of the Central Political Bureau made it clear that efforts should be made to stabilize the real estate market. CITIC Securities pointed out that this round of policies has achieved preliminary results. The number of property viewings has significantly increased; listings are no longer showing a significant growth trend; real transaction volumes have surpassed the traditional low point of the National Day holiday and have also increased significantly year-on-year; public opinion on real estate market reports tends to be positive. It is believed that by the end of 2024, from core areas of first-tier cities to other areas of first-tier cities, and then to second and third-tier cities, the national real estate market can achieve stabilization.
It is worth noting that in a report released by Morgan Stanley on October 6th, it was mentioned that after the A-share market opens, Hong Kong-listed real estate, consumer, and financial stocks may experience a pullback, but this is healthy. Morgan Stanley analysts stated that since mid-September, the forward P/E ratio of the Chinese stock market has risen from nearly 1 standard deviation below the historical average to the historical average level, with an increase of about 35%. Morgan Stanley believes that this sign indicates that policies are shifting towards asset reflation released by the monetary/real estate "one-two punch" and also reflects the market's high expectations for fiscal stimulus policies, but in the short term, it may be too optimistic