China’s Housing-Related Stocks Provide a Refuge
By Robert Li and Amy Li, WSJ,
Markets fell across Asia Tuesday, but China’s were the last holdouts, showing gains into the afternoon (the Shanghai Composite finished a bare 0.1% lower)—thanks in part to stocks that stand to benefit from what Morgan Stanley calls the “unprecedented political commitment” behind the country’s subsidized-housing program. The firm predicts “social-housing” starts this year will very likely match market-priced housing (called “commodity housing”) starts for the first time, making social housing a potential growth compensators for 2011 and 2012, in the case of any commodity-housing downturn.
- Wu Hong/European Pressphoto Agency
- Must…have…steel!
Those beneficiaries include China’s steelmakers, says Everbright Securities. Maanshan Iron gained 5.6% to 4.17 yuan (64 U.S. cents) in Shanghai (its Hong Kong shares were up 1.4% to 4.43 Hong Kong dollars, or 57 U.S. cents). Wuhan Iron & Steel gained 4.8% to 5.02 yuan in Shanghai, Angang Steel gained 3.1 in Shenzhen to 8.74 yuan (flat in Hong Kong at HK$11.14), while Baoshan Iron & Steel gained 3% in Shanghai to 7.53 yuan.
And on a day when the Hong Kong market was down 1.4%, China National Building Materials was up 1.4% to HK$28.65. Even after a run of 63% this year, CNBM’s valuation—while not as attractive as it was—is not yet lofty: 10.8 times this year’s mean forecast earnings per share and nine times next year’s, based on Thomson Reuters surveys.
Categories: Asia, Real Estate