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Market Chatter: LVMH, Kering to Upgrade Stores at New World's K11 Musea Mall in Hong Kong
Daiwa lists the sensitivity analysis of Hong Kong property stocks to profit impact from interest rate cuts (table).
Morgan Stanley released a report stating that about 60% of Hong Kong property stocks' loans are calculated based on floating interest rates. If the Hong Kong Interbank Offered Rate (HIBOR) drops by 100 basis points, it is expected to increase the average industry profit by approximately 5%. The bank provided a sensitivity analysis of the impact on Hong Kong property stocks' profit if the Hong Kong Interbank Offered Rate (HIBOR) drops by 100 basis points: Stock│Percentage of loans with floating interest rates last year│Savings in interest expenses forecast│Projected impact on profit New World Development (00017.HK)│56%│1.112 billion yuan│+31.1% Kerry Properties (00683.HK)│5%
Citi: Low interest rates are more bullish for hong kong property stocks than Singapore. Link REIT (00823.HK) and New World (00016.HK) are attractive.
Morgan Stanley believes that Hong Kong has unique advantages due to the decrease in US interest rates and the accelerated economic growth in the mainland. Even without mainland economic growth, the expected rate cut by the Federal Reserve is at historically low levels and provides a positive outlook for sustainable and high dividend Hong Kong property stocks. The bank expects Hong Kong property prices to rebound by 6% next year after a 8% decline this year. Although the affordability ratio of Hong Kong residences is currently at a historical high of 50%, assuming a mortgage interest rate of 3.2% next year, that ratio is expected to improve to 45%, and rental income deductions for property returns will also turn positive. On the other hand, the bank expects mortgage rates to decline.
New World Development: K11 MUSEA luxury goods retail map is advancing at full speed, with the total area of 7 luxury goods stores doubling.
On September 19, Guolonghui | K11 Cultural and Art District Victoria Dockside opened a new era of high-end luxury goods retail. Several top international luxury brands will launch expansion and upgrades at the cultural retail landmark K11 MUSEA. Over the next four years, brands including Audemars Piguet, Balenciaga, Brunello Cucinelli, Loewe, Saint Laurent, and Van Cleef & Arpels will undergo comprehensive renovations at K11 MUSEA.
K11 Musea: The total area of the seven major international brand stores will double in the next four years, with a total area of over 0.03 million square feet.
New World Development (00017.HK) announced that its shopping center, K11 MUSEA, will launch an expansion and upgrade plan. Over the next four years, several international brands including Balenciaga, Loewe, Saint Laurent, and Prada, which will soon be opening in the mall, will upgrade their stores at K11 MUSEA. The leasing area of these seven major brands at K11 MUSEA will double, with a total area of over 0.03 million square feet. K11 Group also mentioned that the creative brand AllRightsReserved and
Real estate and house rental companies perform well, with Cheung Kong Property (01113.HK) and Wharf REIC (01997.HK) both rising more than 4%.
There is a 62% chance of a 0.5% interest rate cut by the Federal Reserve this week. Real estate and house rental stocks listed in Hong Kong generally rose, with CK Asset (01113.HK) reaching a high of 32.35 yuan. It is now at 32.1 yuan, up 4.22%, with a turnover of 3.7493 million shares and a total investment of 0.119 billion yuan. Sun Hung Kai Properties (00016.HK) hit a high of 81.15 yuan. It is now at 80.9 yuan, up 2.41%, with a turnover of 2.4563 million shares and a total investment of 0.197 billion yuan. Henderson Land (00012.HK) is now at 24.35 yuan, up 2.31%, with a turnover of 1.3696 million shares and a total investment of 3,323.0.
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