Morgan Stanley: Remains optimistic about Hong Kong's property market, with a preference for HENDERSON LAND (00012) among developers.

Morgan Stanley released a research report stating that SHK PPT (00016) saw its stock price drop by 5% yesterday (6th), while the Hang Seng Index fell by 1.6%, due to media reports that mainland authorities have begun taxing gains from offshore insurance policies. The bank remains optimistic about the Hong Kong real estate market and expects that the decline in transaction volume in July caused by similar cross-border capital controls will be temporary. Last month, the bank downgraded New World Development's rating to "in line with the market," mainly because the year-on-year growth of the Centaline City Leading Index has peaked, which may continue to pressure developers. The stock price of SHK PPT is highly correlated with the year-on-year changes in the Centaline City Leading Index, and the bank believes that the index will continue to rise, but the growth rate will slow down. The bank set a target price of HKD 121 for New World Development. Among developers, the bank prefers HENDERSON LAND (00012); among landlords, it favors SWIRE PROPERTIES (01972) and LINK REIT (00823).