BOCOM INTL: HSBC rate cut prepares for recovery next year. Hong Kong real estate first choice LINK REIT (00823).

BOCOM INTL released a research report stating that as the Federal Reserve cut interest rates, major banks in Hong Kong will lower their best lending rates by 25 basis points, surpassing the expected range of 0 to 12.5 basis points. It is believed that the actual mortgage rates will decrease to a level lower than residential rental yield next year, easing price pressure. BOCOM INTL has given a "buy" rating to LINK REIT (00823) and listed it as the top choice among Hong Kong property stocks. They also have a positive outlook on SHK PPT (00016) due to ample salable resources and high turnover rate, giving it a "buy" rating as well. The bank predicts that after the first 50 basis point cut in the Federal Funds rate, Hong Kong banks will only reduce their best lending rates by 25 to 37.5 basis points, and will not be fully synchronized with the rate cut until the first quarter of next year.