Hong Kong’s battered property stocks find themselves on a surprising roll – but how long can it last?
- Wharf REIC has shot up nearly 35 per cent in four weeks
- Other property stocks have seen a run-up, including New World Development, which has jumped 23 per cent recently
Battered Hong Kong property stocks have been on a roll over the past four weeks, led by pacesetters Wharf REIC, owner of the Harbour City and Times Square luxury shopping centres, and New World Development.
In just over four weeks to Wednesday’s close, Wharf REIC’s share price has shot up nearly 35 per cent, such a rapid rise that it crossed an “overbought” technical warning level this week before slipping a bit.
It hasn’t been alone. Since May 29, New World Development has shot up 23 per cent, CK Asset Holdings has risen nearly 14 per cent, Sun Hung Kai Properties and Swire Properties have both advanced about 13 per cent, and Link Reit and Kerry Properties each gained 10 per cent.
In comparison, the Hang Seng Index gained about 8 per cent over the same period.
For property stocks, it’s been quite a change from the steep falls seen over the past 12 months, as social unrest, the coronavirus, the plunge in tourism and rising US-China tensions created uncertainty about the sector’s outlook. Even with the recent spurt, Wharf REIC, for example, is still down nearly 33 per cent over the past year, while Sun Hung Kai Properties has dropped 25 per cent and New World Development has tumbled more than 21 per cent.
But Jonas Kan, a long-time property analyst at Daiwa Capital Markets, is among those who are bullish about the sector, citing strong company fundamentals, strengthening recurrent incomes, and decent and sustainable dividends.