Hong Kong's top developer sells out homes in hours as rates fall
[HONG KONG] Hong Kong's biggest property developer Sun Hung Kai Properties sold out the first batch of homes for a new project within hours, as the lowest mortgage rates in more than two years lured buyers.
Sun Hung Kai sold all 160 units in the 1B phase of Sierra Sea, a residential development in the Ma On Shan area, according to Centaline Property Agency.
A drop in interest rates is helping the city's residential sales, which saw an unprecedented downturn in the past few years. The one-month Hong Kong Interbank Offered Rate is hovering at 1.3 per cent, the lowest since August 2022.
Sun Hung Kai may beat its HK$25 billion (S$4.2 billion) Hong Kong contracted sales target by 50 per cent in the fiscal year ending in June, as mortgage rates drop for new-home buyers, Bloomberg Intelligence said in a note this week.
The city's effective mortgage rate linked to Hibor has dropped to 2.87 per cent, the lowest in more than two years, according to mReferral Mortgage Brokerage Services.
Falling interest rates are positive for property companies, JPMorgan Chase analysts including Karl Chan wrote in a note on May 7. They estimate an average 5 per cent earnings boost for every 100 basis point annualised decrease in financing costs from floating debt for the developers.
Meanwhile, the chances of Hong Kong's residential property market bottoming out are growing on the back of cheaper interest rates, according to Jefferies Financial Group.
Hong Kong home prices are 29 per cent below their peak in 2021, data from the government show. The number of households with negative equity – when the value of a property is less than the outstanding mortgage loan – rose to the highest since 2003 as at the end of March. BLOOMBERG
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a day ago
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Prudential, Sino Biopharm among top stock picks for Hong Kong, Indonesia, Malaysia: UOBKH
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A NEWSLETTER FOR YOU Friday, 8.30 am Asean Business Business insights centering on South-east Asia's fast-growing economies. Sign Up Sign Up 'May's economic data showed weakness and we opine that the (Chinese) government would accelerate support policy implementation in the near term,' its analysts said. They have added Prudential and Sino Biopharm to its 'buy' list. Analyst Kenny Lim maintained a 'buy' call on Prudential with a higher target price of HK$128, given that its new business profit rose 12 per cent year on year in Q1 2025. He expects the positive momentum to continue into H2, mainly due to margin improvement from product repricing actions and an improving product mix. Analysts Carol Dou and Sunny Chen also maintained a 'buy' call on Sino Biopharm with a higher target price of HK$5.80. 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Analyst Benyamin Mikael placed a 'buy' call on Central Omega Resources – with a raised target price of 570 rupiah and potential upside of 46.9 per cent – on the back of 'expected continued earnings momentum and higher nickel ore prices'. Meanwhile, analyst Willinoy Sitorus put a 'buy' call on Cisarua Mountain Dairy, and raised its target price to 6,000 rupiah, with a potential upside of 29 per cent. He noted that it has seen strong consumer food sales, lower milk powder price and strengthening rupiah. Other alpha picks include Aneka Tambang, with a target price of 3,300 rupiah, implying a slight potential downside of 0.6 per cent; Indofood CBP, with an upgraded target price of 13,800 rupiah, offering an upside potential of 27.8 per cent; and Sumber Alfaria Trijaya, with a target price of 3,400 rupiah, representing a 34.4 per cent upside from the closing price on Jun 2. All were assigned a 'buy' rating by UOBKH. Malaysia The Bursa Malaysia KLC Index fell 2.1 per cent in May. Sector-wise, the biggest laggards were automobiles, which dropped 17 per cent, and consumer stocks, which fell 4.3 per cent, said UOBKH. The strongest performers were construction stocks, which jumped 11.6 per cent, property-related stocks, which climbed 3.2 per cent, and building materials. Other notable gainers included the port sector, which rose 6.5 per cent, and selected subsectors within technology, analysts noted. On the downside, glove manufacturers posted a 11.3 per cent loss. UOBKH's May Malaysian portfolio outperformed the benchmark, delivering an average positive return of 7.2 per cent. Only RHB Bank posted negative returns, dropping 3.3 per cent in the month. Looking ahead, UOBKH is shifting focus towards domestically driven catalysts, citing potential headwinds for exporters from forex volatility and a seasonal 'summer lull', coinciding with the end of the US 90-day tariff pause and signs of a US slowdown. A major domestic catalyst is the kick-off of the Penang LRT project, benefiting construction players such as Gamuda and Hume Cement. Other key drivers included continued strong earnings from Duopharma and NorthEast, and the expected broad adoption of MyDigital ID Superapp, developed by MyEG-Mimos – particularly among subsidy recipients and travellers. UOBKH has taken a less defensive stance in its latest alpha picks, adding Hume Cement and removing citing limited near-term catalysts for IOI Properties and NationGate, and reduced need for defensives following the market pullback. Analyst Ku Wei Xiang maintained a 'buy' call on Hume Cement, with a target price of RM4.05, implying 54.5 per cent upside from the closing price on Jun 9. He noted that the commencement of the Penang LRT project would translate to around RM2 billion (S$607.1 million) to RM2.6 billion in cement demand, assuming a RM13 billion construction cost of the project. Other alpha picks included Duopharma, with an unchanged target price of RM1.46; Eco World, with an unchanged target price of RM2.37; Gamuda, with a raised target price of RM5.55; IJM Corporation, with a higher target price of RM3.15; and NorthEast, with an unchanged target price of RM0.47. All were assigned a 'buy' rating by the research house.
Business Times
a day ago
- Business Times
Prudential, Sino Biopharm among stock picks for Hong Kong, Indonesia, Malaysia: UOBKH
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A NEWSLETTER FOR YOU Friday, 8.30 am Asean Business Business insights centering on South-east Asia's fast-growing economies. Sign Up Sign Up 'May's economic data showed weakness and we opine that the (Chinese) government would accelerate support policy implementation in the near term,' its analysts said. They have added Prudential and Sino Biopharm to its 'buy' list. Analyst Kenny Lim maintained a 'buy' call on Prudential with a higher target price of HK$128, given that its new business profit rose 12 per cent year on year in Q1 2025. He expects the positive momentum to continue into H2, mainly due to margin improvement from product repricing actions and an improving product mix. Analysts Carol Dou and Sunny Chen also maintained a 'buy' call on Sino Biopharm with a higher target price of HK$5.80. This is largely due to the company's strong clinical progress with its oncology pipeline and innovative drugs which drove its 2024 revenue to 28.9 billion yuan (S$5.2 billion), up 10.2 per cent from the previous year. Its six newly approved drugs in 2024 are expected to hit double-digit revenue growth in 2025. The bank maintained a 'buy' call on other Chinese stocks including Alibaba, China Resources Beer and Xiaomi. Indonesia UOBKH removed all of its previous alpha picks for Indonesia following notable performance shifts in May 2025. It said that due to anticipation of monetary policy easing – which materialised when Bank Indonesia implemented a 25 basis point rate cut on May 21 – companies including Bank Central Asia and Bank BTN outperformed during the month. Telco service company Erajaya Swasembada also delivered strong returns, supported by positive sentiments from the iPhone 16 launch event in April, increasing traction in the Chagee tea brand, and optimism ahead of the upcoming electric vehicle launch of XPeng. Conversely, technology-related names such as GoTo and Buka underperformed, as investor attention turned towards beneficiaries of interest rate cuts and laggard sectors. The Indonesian government introduced six stimulus initiatives aimed at boosting domestic consumption through June and July, including wage subsidies and public transport discounts. These measures, combined with falling oil prices and a strengthening rupiah, are expected to improve sentiment in the consumer non-cyclical sector, which underperformed the Jakarta Stock Exchange Index by 5.3 per cent in May, the analysts said. Looking ahead, UOBKH is shifting its focus towards consumer-related, 'safe-haven' and high-growth stocks. Analyst Benyamin Mikael placed a 'buy' call on Central Omega Resources – with a raised target price of 570 rupiah and potential upside of 46.9 per cent – on the back of 'expected continued earnings momentum and higher nickel ore prices'. Meanwhile, analyst Willinoy Sitorus put a 'buy' call on Cisarua Mountain Dairy, and raised its target price to 6,000 rupiah, with a potential upside of 29 per cent. He noted that it has seen strong consumer food sales, lower milk powder price and strengthening rupiah. Other alpha picks include Aneka Tambang, with a target price of 3,300 rupiah, implying a slight potential downside of 0.6 per cent; Indofood CBP, with an upgraded target price of 13,800 rupiah, offering an upside potential of 27.8 per cent; and Sumber Alfaria Trijaya, with a target price of 3,400 rupiah, representing a 34.4 per cent upside from the closing price on Jun 2. All were assigned a 'buy' rating by UOBKH. Malaysia The Bursa Malaysia KLC Index fell 2.1 per cent in May. Sector-wise, the biggest laggards were automobiles, which dropped 17 per cent, and consumer stocks, which fell 4.3 per cent, said UOBKH. The strongest performers were construction stocks, which jumped 11.6 per cent, property-related stocks, which climbed 3.2 per cent, and building materials. Other notable gainers included the port sector, which rose 6.5 per cent, and selected subsectors within technology, analysts noted. On the downside, glove manufacturers posted a 11.3 per cent loss. UOBKH's May Malaysian portfolio outperformed the benchmark, delivering an average positive return of 7.2 per cent. Only RHB Bank posted negative returns, dropping 3.3 per cent in the month. Looking ahead, UOBKH is shifting focus towards domestically driven catalysts, citing potential headwinds for exporters from forex volatility and a seasonal 'summer lull', coinciding with the end of the US 90-day tariff pause and signs of a US slowdown. A major domestic catalyst is the kick-off of the Penang LRT project, benefiting construction players such as Gamuda and Hume Cement. Other key drivers included continued strong earnings from Duopharma and NorthEast, and the expected broad adoption of MyDigital ID Superapp, developed by MyEG-Mimos – particularly among subsidy recipients and travellers. UOBKH has taken a less defensive stance in its latest alpha picks, adding Hume Cement and removing citing limited near-term catalysts for IOI Properties and NationGate, and reduced need for defensives following the market pullback. Analyst Ku Wei Xiang maintained a 'buy' call on Hume Cement, with a target price of RM4.05, implying 54.5 per cent upside from the closing price on Jun 9. He noted that the commencement of the Penang LRT project would translate to around RM2 billion (S$607.1 million) to RM2.6 billion in cement demand, assuming a RM13 billion construction cost of the project. Other alpha picks included Duopharma, with an unchanged target price of RM1.46; Eco World, with an unchanged target price of RM2.37; Gamuda, with a raised target price of RM5.55; IJM Corporation, with a higher target price of RM3.15; and NorthEast, with an unchanged target price of RM0.47. All were assigned a 'buy' rating by the research house.
Business Times
2 days ago
- Business Times
Hong Kong to maintain US dollar peg despite geopolitical tensions
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