[ET Net News Agency, 21 May 2018] On 14 May, the State Council released a notice in
relation to the protection of property rights, including the rights to own, use, transfer
and earn income from properties in China.
HSBC Global Research said the announcement is vague as action points from the local
governments remain unclear. While the local media has interpreted this as a sign of policy
relaxation on measures such as home purchase restrictions, re-sell restrictions and sales
price restrictions, ther research house believes that any loosening would contradict the
government's current policy stance.
It noted taht the Ministry of Housing and Urban-Rural Development (MOHURD) held several
meetings in early May with government officials in cities with signs of an overheating
housing market, including Xi'an, Haikou, Sanya, Changchun, Harbin, Kunming, Dalian,
Guiyang, Xuzhou and Foshan. The MOHURD urged local governments to take accountability to
stabilize their local property markets, reflecting its firm policy stance on curbing
property speculation.
HSBC believes the central government's stance toward the housing sector is likely to
remain hawkish in the foreseeable future. It believes companies with compelling bottom-up
stories, respectably strong growth in 2018 and beyond, and strong balance sheets
(particularly under a tightened liquidity environment) will be in a more advantageous
position.
HSBC's top picks are: China Overseas Land & Investment (00688), China Resources Land
(01109), Longfor Properties (00960), Shimao Property Holdings (00813), CIFI Holdings
(00884) and Logan Property Holdings (03380). (KL)