BoCom International issued a report pointing out that the SFC will deepen cooperation with Hong Kong and take five measures to further expand and optimize the Shanghai-Shenzhen-Hong Kong Stock Connect mechanism, help Hong Kong consolidate and enhance its status as an international financial center, and jointly promote the coordinated development of the capital markets of the two places. Among them, REITs will be included in the Shanghai-Shenzhen-Hong Kong Stock Connect, and it is proposed that the mainland and Hong Kong will be eligible with reference to the stock and ETF interconnection system arrangements between the two places.Galvanbrookie34The REITs has been incorporated into the Shanghai-Shenzhen-Hong Kong Stock Connect target to further enrich the trading variety of the Shanghai-Shenzhen-Hong Kong Stock Connect.
The bank believes that the inclusion of the Shanghai-Shenzhen-Hong Kong Stock Connect will bring purchasing power to H-REITs and support short-term share prices, which is expected to usher in a revaluation. According to the data of the HKEx as of April 19, Hong Kong real estate stocks held by southbound funds (constituent stocks of the Hang Seng property Index, excluding mainland real estate companies) account for about 0% of the outstanding shares.Galvanbrookie34.6% (based on weighted average market capitalization). Based on the average daily trading volume over the past 250 trading days, it is equivalent to about 4.4 trading days of these stocks.
Although the bank believes that C-REITs will provide investors with relatively more choices of mainland assets in the future, the stability of the Hong Kong property market and the recent policy relaxation have attracted the attention of mainland investors. As a result, the bank believes that H-REITs, which has more Hong Kong assets, will benefit more from inclusion in the Shanghai-Shenzhen-Hong Kong Stock Connect. In terms of market capitalization, Leader is currently the largest real estate trust in Hong Kong and Asia, with the bank maintaining its target price of HK $48.7 and a "buy" rating.
