The epic real estate policy exceeded expectations, the real estate ETF was seven consecutive yang, and Da Mo looked at the low Chinese real estate stocks? What do fund companies think?

Finance Associated Press

2024-05-18 09:28Published on the official account of Cailianshe under Shanghai Poster Industry Group

Finance Associated Press, May 18 (Reporter Yan Jun) and other policies, there are policies. On May 17, the market's sentiment revolved around the real estate sector.

After the recent high-level meeting of the central government set the tone of "overall study of policy measures to digest the stock of real estate and optimize the incremental housing", the policy thinking of real estate has shifted from the supply side to the demand side, and focused on destocking.

Within one day, the central bank released an "epic" move, canceling the lower limit of the housing loan interest rate policy, lowering the provident fund loan interest rate, the lower limit of the lowest proportion of the first home in history, and the central bank will set up a 300 billion affordable housing reloan.

A-share real estate rose rapidly at the end of the session, and the premium and volume of real estate-themed ETFs rose sharply, among them, Yinhua Real Estate ETF was close to the daily limit, with a premium of 1.71%, and the trading volume of Huabao Real Estate ETF hit a record high.

In the U.S. stock market, Chinese-funded real estate rose sharply, and Fang Duoduo expanded its rise to 323.77% after the opening, triggering a circuit breaker and re-suspending trading shortly after the resumption of trading. As of the close, Fang Duoduo rose by more than 300%.

The epic real estate policy exceeded expectations, the real estate ETF was seven consecutive yang, and Da Mo looked at the low Chinese real estate stocks? What do fund companies think?

However, at the same time as the policy was implemented, Da Mo downgraded his view on China's real estate sector from "attractive" to "in line with the broader market". Although Chinese real estate stocks have surged about 50% since mid-April, driven by policy easing and improved investor sentiment, the fundamentals remain weak and uncertainty is high in the second half of the year, Da Mo reported. Therefore, investors are advised to continue to choose defensive stocks such as CR Land, China Overseas Land & Investment & Greentown China. Downgraded the ratings of Longfor Group and Poly Development from "overweight" to "keeping pace with the broader market".

Some people in the industry believe that the market has given the answer to the effect of the policy. The logic behind it lies in the fact that the central bank has indicated its attitude, and the policy and strength can be adjusted in the future. After the market's expectations for real estate are less pessimistic, it is good for the overall risk appetite to improve.

Guotai Fund said that the recent intensive policies have greatly boosted investor sentiment, but it is necessary to observe the rhythm of real estate destocking after the policy and whether the fundamentals of real estate companies have improved significantly.

Premiums, volumes, and real estate-themed ETFs rose strongly

On the afternoon of the 17th, boosted by heavy policies, the real estate sector continued to soar in the afternoon, and real estate stocks broke out across the board, with the real estate index rising by more than 7% and a weekly increase of 12.65%. In terms of individual stocks, more than 20 shares such as Vanke A and Gemdale Group have a daily limit; 59 real estate stocks rose more than 6%.

In terms of ETF performance, real estate-themed ETFs took the lead, with Yinhua Real Estate ETF rising by 9.49%, almost up and down; Huabao Real Estate ETF also rose by more than 9%, with a turnover of 215 million, a record high, the largest Southern Real Estate ETF rose by 8.53%, with a turnover of more than 1 billion, and ChinaAMC Real Estate ETF also rose by 7.65%. The market showed a significant premium, with the two real estate ETFs reaching a premium of 1.71% and 1.31% respectively, with obvious buying power.

After the updated net value of the fund on the evening of the 17th, the real estate theme fund also led the industry, with China Merchants CSI 300 Real Estate, Huabao CSI 800 Real Estate ETF, and Yinhua CSI Mainland Real Estate Theme ETF rising by more than 8%. In fact, in terms of rate of return, the launch of the real estate sector has lasted for a month, and many real estate theme funds have risen by nearly 30% in the past month.

Jiang Junyang, fund manager of Huabao Real Estate ETF, believes that with the continuation of the loose tone of policies at both ends of supply and demand, the supply-side clearance under the support of financing is basically over, and the demand-side policy stimulates or guides the fundamentals to stabilize and repair, and the industry has short-term opportunities for rebalancing the relationship between supply and demand, while the transformation of urban villages and the construction of affordable housing are expected to provide incremental space for the industry.

In addition, the market pays more attention to the state-owned enterprises in the real estate sector with relatively stable fundamentals, strong financial strength, and more high-quality and abundant land reserves, as well as high-quality private enterprises that take the lead in completing credit repair in this round of industry clearance.

Niu Zhidong, fund manager of the building materials ETF of Wells Fargo Fund, said that while paying attention to investment opportunities related to the real estate industry, investors can also pay attention to investment opportunities related to the post-cycle of real estate, such as home appliances and consumer building materials. Historically, these two sectors have relatively stable fundamentals, stable profitability, and a relatively good market competition pattern.

"Historically, when the growth rate of infrastructure investment has increased significantly or the policy of the real estate industry has been greatly relaxed, the prosperity of the building materials industry will also increase. Standing at the current point in time, with the gradual stabilization and improvement of real estate expectations, the demand of leading enterprises in the building materials industry is also expected to warm, the profitability is relatively stable, the valuation is low, and investors can pay due attention. Niu Zhidong said.

are waiting for the policy, the institution interprets: the 300 billion affordable housing refinancing attitude is clear

On the news side, the central bank issued three consecutive issues, involving a number of adjustments to down payments and mortgage interest rates.

First, the central bank and the State Administration of Financial Supervision and Administration issued the "Notice on Adjusting the Minimum Down Payment Ratio of Personal Housing Loans", stating that for resident families who take out loans to purchase commercial housing, the minimum down payment ratio of commercial personal housing loans for the first house is adjusted to not less than 15%, and the minimum down payment ratio for commercial personal housing loans for second houses is adjusted to not less than 25%.

Second, the central bank issued the "Notice on Adjusting the Interest Rate Policy for Commercial Personal Housing Loans", canceling the lower limit of the interest rate policy for commercial personal housing loans for the first and second houses at the national level.

Third, the central bank issued the "Notice on Reducing the Interest Rate of Personal Housing Provident Fund Loans", which lowered the interest rate of personal housing provident fund loans by 0.25 percentage points from May 18.

Subsequently, at the regular policy briefing of the State Council, Tao Ling, deputy governor of the People's Bank of China, said that the central bank will set up a 300 billion yuan affordable housing reloan. The path of where the money comes from also gives the answer: 21 national banks with an interest rate of 1.75%. Banks are encouraged to issue loans to local state-owned enterprises selected by the city government to purchase completed and unsold commercial housing for use as affordable housing.

Dong Jianguo, Vice Minister of the Ministry of Housing and Urban-Rural Development, has fought a tough battle to ensure the delivery of commercial housing projects to prevent and deal with the risk of unfinished projects; further give play to the role of the urban real estate financing coordination mechanism to meet the reasonable financing needs of real estate projects; Promote the digestion of the stock of commercial housing and the proper disposal of the stock of land to revitalize the four aspects, and strive to promote the policy of guaranteeing the delivery of housing. Among them, the Ministry of Housing and Urban-Rural Development pointed out that the city government adheres to the principle of "ordering according to demand", and can organize local state-owned enterprises to purchase a part of the stock of commercial housing at a reasonable price for affordable housing.

China Southern Asset Management believes that in the context of active domestic policies, it is expected to drive a moderate recovery of the domestic economy, raise market risk appetite, and support the overall A-share market. In terms of market style, we are optimistic about the high-performance leading indices represented by CSI A50 and CSI 300, as well as low-valuation and high-dividend assets with stable operation and active dividends.

"Trade-in" is promoted, and the scale of funds collected and stored is expected to be 1 trillion yuan

At present, the number of listings and transactions of second-hand houses is larger than that of new houses, and the de-conversion cycle of second-hand houses is much longer than that of new houses, which makes stock houses the main supply side of the market. Residents just need to concentrate on second-hand houses, and improvements are mainly in first-hand houses.

Huaxia Fund said that in order to break through the blockages of the current market first-hand and second-hand housing replacement chains and promote the release of improved demand, more than 60 cities across the country, including Shanghai and Shenzhen, have expressed their support for housing "trade-in".

Some brokerages believe that in order to achieve the effect of destocking, the scale of funds collected and stored is expected to be larger. If the scale of 1 trillion yuan is implemented in the future, it is expected that the supply and demand situation of the real estate industry will be greatly improved, and real estate enterprises and real estate chains will benefit significantly.

Guotai Fund pointed out that the relevant ministries and commissions have adopted correct and necessary policy measures on the demand side of real estate, which is conducive to the prevention of financial systemic risks in the mainland and is of great significance to promoting the stable and healthy development of real estate and the overall economic market. At the same time, it is also necessary to recognize that real estate destocking is a long-term process, which requires sustained policy efforts and greater financial support.

(Financial Associated Press reporter Yan Jun)

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