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<Research>JPM: Mainland's New Outbound Investment Rules Have Limited Impact on HK Home Mkt; Buy on Dips CK ASSET, SHK PPT etc.
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Following the "Futu incident" on May 22, which triggered investor concerns over tighter controls on capital outflows from mainland China, the State Council of China promulgated new regulations on outbound investment on June 1, raising further questions among investors, JP Morgan said in its report. However, the broker viewed that this regulation alone will have very limited impact on Hong Kong's residential property market. JP Morgan explained that capital outflow controls are not new. The latest rules aim to formalize a more comprehensive legal framework and provide clearer guidance for outbound investment. While "individuals" have now been included under the regulatory scope, the controls appear to focus more on corporates' outbound direct investment (ODI), and there is no explicit prohibition on mainland residents purchasing properties in Hong Kong. In the broker's estimation, even under a worst-case scenario, where all "mainland-residing mainland buyers" (estimated to account for 5-10% of transaction volume) stop buying homes in Hong Kong, it would not overturn the property market's upcycle, as most "mainland Chinese buyers" reside in Hong Kong or hold Hong Kong identity cards. The broker recommended accumulating developer stocks on price pullbacks, including SHK PPT (00016.HK), SINO LAND (00083.HK) and CK ASSET (01113.HK); for landlords, it suggested SWIREPROPERTIES (01972.HK), Hongkong Land and HANG LUNG PPT (00101.HK). Auto-translated by AI This article was automatically translated by AI, the original language version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. More Details
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