JPMorgan Chase & Co. has teamed up with six property stocks―CK Asset Holdings Ltd; Henderson Land Development Co; New World Development Co; Wharf Holdings Ltd; Hang Lung Properties Ltd; and Link REIT―to help fix the current Hong Kong turmoil, Bloomberg reports.
JP Morgan indicates that office rents will decrease by 40 per cent, while residential and retail sales prices will drop by 30 per cent.
Based on a report released earlier this week, analysts at the New York-based investment bank said that most investors are starting to factor in the uncertainties that might impact the city’s status as an international financial centre, including a re-escalation of the US-China trade war and the social unrest in Hong Kong.
“The primary objective of our worst-case analysis is to identify stocks that are still good for investment even under this sort of scenario,” analysts led by Cusson Leung commented.
JP Morgan said that from the six stocks, four were downgraded to underweight, and two to neutral: CK Asset has been diversifying away from properties in Hong Kong and China; Henderson Land has done a good job ramping up asset disposals; Wharf and Hang Lung have promising shopping malls after some tenant reshuffling; while New World should see the most substantial increase in rents. ― Construction+ Online