[I-bank focus]Hang Seng Property Index seen to outperform

    Morgan Stanley expects 2014 to mimic 2012 as Hang Seng Property Index (HSP) outperforms the Hang Seng Index (HSI), driven by strong volume,
rising property prices, and limited risk of interest rate increases.
  Supply-demand remains favorable, the research house added.
  Morgan said HK developers are attractively valued for the past 18 months, averaging around 40% discount to NAV. This was justified based on an imminent rise in US interest rate (and thus HK mortgage rate) and a stringent regulatory regime to control the property
prices.
  It said property prices are up 4% YTD (instead of the consensus expectation of 20%
decline). In the past nine months, the volume of primary units has almost doubled, and prices are higher than expected. On top of that, the expected timeline for an interest rate hike in the US has been pushed out, and regulation has been benign at best. This provided a perfect backdrop for discount to NAV to narrow.
  Morgan now expects HK residential property prices to go up by 5% in each of 2014 and 2015. Its revised ratings and target prices for the property players it covers are as follows: 
  Name                      Rating                          Target Price
  --------------------------------------------------------------------------------
  Cheung Kong (00001)       Overweight                      HK$162  (from HK$148)
  Henderson Land (00012)    Equal-weight                    HK$51   (from HK$40)
  Kerry Properties (00683)  Overweight                      HK$35   (from HK$30)
  SHK Properties (00016)    Overweight                      HK$135  (from HK$123)
  Sino Land (00083)         Overweight (from Equal-weight)  HK$15.9 (from HK$11.3)
  New World Dev (0017)      Equal-weight (from Underweight) HK$10.2 (from HK$7.6) 
  Hang Lung Props (0101)    Equal-weight                    HK$26   (from HK$25)
  Hopewell (00054)          Underweight                     HK$26   (from HK$24)
  Hysan (00014)             Equal-weight                    HK$37   (from HK$37)
  Link REIT (00823)         Underweight                     HK$41   (from HK$36)
  Swire Properties (01972)  Equal-weight                    HK$25   (from HK$24)
  Wharf Holdings (00004)    Equal-weight                    HK$60   (from HK$55)