New Round of Policy Expectations Supports Real Estate Stocks, Says CICC
Securities Times Net News – As the economic downturn continues, a new round of policy expectations is emerging, which is providing support for real estate stocks in terms of both absolute and relative returns. According to China International Capital Corporation (CICC), lower valuations and positions have further bolstered the real estate sector.
CICC believes that in the second half of the year, as the economy slowly bottoms out and weak recovery persists, the sector may experience fluctuations within a certain range. Therefore, it is advisable to adopt a bottom-up stock selection strategy while the supply-side reform is deepening and taking effect.
From March to June, CICC suggests focusing on two main investment lines. Firstly, “enterprises” that are anticipated to be the first beneficiaries of local economic recovery. Secondly, “cash cows” that hold core assets in the real estate industry. These two categories of stocks are expected to offer attractive investment opportunities.
Over a period of six months or longer, CICC recommends paying attention to high-quality non-state-owned enterprises and their efforts to consolidate finances and achieve steady development. This particular segment is deemed to have potential for significant growth.
Furthermore, CICC foresees opportunities for revaluation of targets holding high-quality commercial real estate, particularly with the issuance of consumer infrastructure Real Estate Investment Trusts (REITs). These REITs could bring about a fresh wave of interest and potential revaluation in the real estate market.
It is important to note that the views expressed in this article are for reference purposes only and do not constitute substantive investment advice. Investors are advised to operate at their own risk.
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