UBS: It is expected that Hong Kong residential prices will remain stable this year, with Henderson Land Development and Sun Hung Kai Properties being the top choices.

UBS published a research report indicating that Hong Kong developers may have passed the worst refinancing risk. As of December last year, the total amount of developers' maturing loans decreased by about 20% year-on-year to HK$201 billion. In addition, the significant reduction in Hong Kong Interbank Offered Rate (HIBOR) will also drive residential transactions. However, pricing issues still exist as highly leveraged developers still hold 9,100 unsold units. The bank estimates that Hong Kong residential prices will remain stable this year, but next year, with interest rate cuts, rental growth recovery, and fewer new launches, prices are expected to increase by 0 to 5%. The bank remains positive on Hong Kong developers, with Henderson Land and New World Development being its top picks, raising their target prices by 12% and 2% to HK$29 and HK$96 respectively, while Sun Hung Kai Properties' target price was lowered from HK$10.5 to HK$9.8.