Latest government support to mainly benefit non-distressed property developers – JP Morgan
Latest government support to mainly benefit non-distressed property developers – JP Morgan

Latest government support to mainly benefit non-distressed property developers – JP Morgan

 

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The PBOC and the China Banking and Insurance Regulatory Commission (CBIRC) have released 16 measures to support real estate financing and guided banks to issue letter of guarantee to quality developers to give them access to pre-sales funds in their escrow account.

The new measures are expected to benefit mainly non-distressed private-run developers, JP Morgan said in a note. 

Longfor Group, Country Garden, Seazen Holdings, China SCE Group, Country Garden Services and S-Enjoy Service Group Co. are expected to outperform the broader market in the near term, it said.

The rebound, however, without the support from more positive catalysts, will likely be relatively short-lived, the bank noted. For the medium term, JPMorgan favored SOEs such as China Overseas Land & Investment, China Resources Land, China Resources Mixc Lifestyle Services, Poly Property Services and China Overseas Property.