UBS: Reiterates that Hong Kong property prices will remain stable this year, local developers are optimistic about SHK Properties, Henderson Land, etc.

UBS released a report indicating that after the Federal Reserve's 25 basis points rate cut and the Hong Kong Monetary Authority's adjustment of the overnight discount rate, Hong Kong banks announced a reduction in their best lending rate by 12.5 basis points to 5.125%, in line with market expectations. Following the adjustment, new residential mortgage rates will decrease from 3.5% to 3.375%. UBS reiterated its forecast that Hong Kong property prices will remain stable in 2025, with a moderate increase of 0% to 5% expected in 2026 after inventory digestion. Among developers, UBS is optimistic about the performance of Sun Hung Kai Properties, Henderson Land Development, and Kerry Properties compared to New World Development. UBS also favors Hang Lung Properties, as the decline in HIBOR will lower its interest expenses. UBS has raised its target price for Sun Hung Kai Properties by 14% to 11.2 Hong Kong dollars, with a "buy" rating, reflecting a decrease in the discount to net asset value from 40% to 35%, supported by strong sales of Victoria Harbour Residences and Paragon. Possible reduction of dividend payments with shares.