It’s reported that former Vice Premier Liu He may return to his role as a guide of China’s economy and since Liu considered the real estate sector as the backbone of China’s economy and is therefore considered a strong supporter of the housing sector, the news of Liu’s return triggered market expectations for strong government policies to support the domestic housing sector, according to a research note released by Daiwa Securities.
In addition, Premier Li Qiang said during a forum that measures would be taken to maintain the economic growth target of China this year, which also boosted market expectations for more policy support.
Daiwa believed that new home sales in Mainland China in the past week remained weak due to the Dragon Boat Festival holiday and continued weak homebuyer sentiment. The broker focused on financially sound private-owned developers such as Longfor Group, while Yuexiu Property, China Resources Land and China Overseas Land and Investment remained the broker’s more defensive picks.