Mainlanders drive up home prices

Business | 29 Sep 2016

The media have started reporting about record prices achieved for properties in Hong Kong's secondary housing market, as more and more mainland investors invest in the SAR. Other than this, there was no major local news.

The local housing market has nearly recovered fully after the 15-20 percent drop in prices since last October. Morgan Stanley favors Sun Hun Kai Properties (0016), Wharf (0004) and Link REIT (0823), while Goldman Sachs likes Cheung Kong Property (1113) and Swire Properties (1972).

Value Partners (0806) is one of the most successful local fund management firms over the past 20 years. Chairman Cheah Cheng-hye said now is the best time to buy Chinese stocks.

The local market is the world's seventh biggest. After the Shenzhen-Hong Kong stock link starts to operate, the markets in the SAR, Shenzhen and Shanghai will be united and emerge as the world's second biggest.

The price earnings ratio of Hong Kong-listed H shares now stands at just 13.5 times, making them relatively cheap. Cheah is bullish on new economy sectors such as IT, medical care, education, services and low-valuation energy and industrial.

Dr Check and/or The Standard bear no responsibility for any investment decision made based on this column.

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