Developers extend rally amid absence of curbs
Property firms expected to benefit from pick-up in sales activity but fast asset turnover is critical
Shares of property developers continued to climb yesterday after Wednesday's gains on relief that no harsh cooling measures were announced in the annual policy address by chief executive.
Cheung Kong, Sun Hung Kai Properties and Henderson Land Development rose between 0.5 per cent and 1 per cent as analysts expected home sales transactions to pick up now.
Cheung Kong, which had climbed 1.88 per cent on Wednesday, gained 0.99 per cent to HK$131.40 yesterday, while SHKP edged up 0.8 per cent to HK$126 following a 1.38 per cent rebound the previous day. Henderson added 0.59 per cent to HK$59.15.
Property agency Midland Holdings, which hit an intraday high of HK$4.25, closed up 4.27 per cent at HK$4.15 as investors expect the stock to benefit from a recovery in sales activity. Mid-sized developer KWah also went up 4.27 per cent to HK$4.64.
Chief Executive Leung Chun-ying revealed on Wednesday in his first policy address that 67,000 private housing units would become available in the coming three to four years and 22,000 public rental units would be available for allocation each year.
"In context of where future supply comes from in various channels, fast asset turnover should be a more critical strategy than just optimising profitability, since the macro environment could turn volatile and money flow is highly unpredictable," a report by Jefferies Equity Research said yesterday.