Blue chip stocks in Hong Kong stand to recover if there is a recovery from its current political and economic situation, analysts believe. Morningstar analysts believe there are buying opportunities especially in real estate and banking stocks. Here are some of the stocks the analysts are hopeful about.
“We do think that the laggards hit by the protest concerns will recover once protests end, and there are some buying opportunities among these names,”Morningstar analysts
MTR Corporation (066.HK)
Hong Kong subway operator has experienced substantial disruption due to the ongoing protests. Protestors have vandalised and defaced MTR’s subway stations. As such, the rail operator has suspended, as well as ended early in their busiest stations.
As MTR Corp makes substantial amount of its money from developing commercial and residential property next to its subway stations, the decline in commercial activity in Hong Kong has hurt real estate values, further pushing down the MTR’s stock.
Although shares of MTR initially rose during the protests in a “flight to safety” rally, they have fallen almost 20% from their mid-July highs. During that time, nothing has changed with the company. If the protests end, MTR Corporation will remain one of Hong Kong’s best infrastructure and developer bets as rail operations return to normal and property activity rebounds.
BOC Hong Kong (2388.HK)
Bank of China (Hong Kong), a local unit of China’s largest bank and one of three currency issuers in the city, now presents a buying opportunity. The bank’s branches have been affected by vandalism during the protests. The stock has fallen over 20% in the past 6 months. It currently has a dividend yield of about 5.4%.
Swire Properties (1972.HK)
Swire Properties, one of the biggest owners and managers of high-end shopping centres and office blocks in Hong Kong stand to benefit if public order resumes. The stock has fallen about 23% in the last 6 months, making it one of the biggest losers among constituents of the Hang Seng Index.
Sun Hung Kai Properties (0016.HK)
Shares in Sun Hung Kai Properties have fallen 15% in the last 6 months. As Hong Kong’s largest developer by market capitalisation, the company’s exposure to properties in the city could make it one of the biggest beneficiaries when the city recovers from its current conditions.