The election of Beijing loyalist Leung Chun-ying as Hong Kong's next leader will have a positive impact on the city's property sector as political uncertainty clears, says one expert.
Ahead of the vote property stocks had fallen on uncertainty over policy direction in the real estate sector, but now with the elections out of the way, Dickie Wong, Executive Director, Research at Kingston Securities, says he expects an uptick in their stock prices at least in the short-term.
In the run up to the election there were concerns that the new leader might introduce tough policies to control the city's runaway property prices. But Wong says, "I don't think there will be much of a policy change in the next year or two. And most of the property stocks have rebounded quite a bit, (since the results came out)."
On Monday the broader index ended flat, but the property counters did much better with both Sino Land and New World Development up almost 4 percent and Henderson Land and Sun Hung Kai Properties ending the day higher almost 2 percent, while Hang Lung Properties closed almost a percent up.
Wong told CNBC that he expects more upside in the shares of property companies that supported Leung's campaign like Hang Lung Properties and New World Development and has a buy call on them for the short-term. But longer-term, after the euphoria over Leung's victory has faded, Wong rates Sun Hung Kai properties, Hong Kong's largest developer by market capitalization, as a buy.
He says that the company's portfolio is strong and that he is not concerned about the arrest, and subsequent release, of one of the company's senior executives in relation to a bribery investigation. "Its property quality is superb... the investigation won't affect the long-term growth of the stock," he said.