Property stocks get boost as fears ease
Shares of property developers rallied yesterday following enthusiastic buyer response to their recent launches.
Investor interest in property stocks had returned as concerns over the city's market outlook began to ease, analysts said.
'The market was worried that Chief Executive Leung Chun-ying would introduce tough measures to rein in the property market,' Convoy Investment Services and Convoy Asset Management director Michael Wong Man-sek said.
On Monday, Leung refrained from announcing any additional measures to cool the property market while handing out HK$7.35 billion worth of sweeteners.
Cheung Kong (Holdings) climbed 4.2 per cent to HK$100.80 after the company reported encouraging property sales. Sun Hung Kai Properties rose 1.5 per cent to HK$95.95, while New World Development gained 2 per cent to HK$9.88 as the company said it had set a sales target of crossing HK$10 billion this year. Sino Land added 3.5 per cent to HK$12.96. The Hang Seng Index ended the day up 1.75 per cent.
Kenny Tang Sing-hing, general manager of AMTD Financial Planning, said the benchmark index rose largely on the back of mainland banks and Hong Kong developers.
Some stock investors, he said, were now shifting their portfolios to Hong Kong property developers from Hong Kong-listed mainland developers, which have surged in the past weeks.
On Monday, Cheung Kong said it had sold 2,700 units so far this year, raking in HK$17 billion. Executive director Justin Chiu Kwok-hung expressed confidence that the company would achieve HK$30 billion of sales this year.
The latest round of sales at The Beaumount project in Tseung Kwan O has been a success. After Cheung Kong launched 596 two-bedroom flats at the development, it cleared about 500 over the past weekend itself, selling them at an average price of HK$5,800 per square foot.
Including the three-bedroom flats sold previously, about 1,200 units, or 67 per cent, of the project's 1,777 units have been sold, according to a report released by Nomura Equity Research on Monday.
Henderson Land Development also launched its 133-unit High West in Western last week. The response was equally strong, with about 100 units snapped up in the past four days, at an average price of HK$14,293 per sqft, Nomura said.
Home sales in the secondary market are also recovering. An index compiled by Midland Realty based on 35 housing estates showed fewer than 100 transactions for six weeks, before rising 16.8 per cent week on week to 111 in the week starting July 2.
Homebuyers' sentiment has improved after Beijing cut interest rates, while lower-than-expected tender bids for an erstwhile North Point estate have prompted sellers to reduce asking prices, according to the Nomura report.