Vanke Rarely Hits Limit Up

China Vanke, whose stock price has been "falling endlessly," swept away the past gloom.

On April 29th, China Vanke's A-shares hit the daily limit up, with an increase of 10.04%. This is the first rare daily limit up for China Vanke A-shares in the past year and a half, and its market value has returned to the 90 billion yuan mark. Its Hong Kong stocks also surged by 18.99%, marking the largest single-day increase in seven and a half years.

Several of China Vanke's bonds also saw strong gains. Among them, "22 Vanke 04," "21 Vanke 04," and "22 Vanke 06" all rose by more than 6%.

According to investors' analysis from Wall Street News, China Vanke's trading limit up indicates a drastic change in investors' sentiment towards it. Looking ahead, the real estate sector may become more optimistic.

In addition to China Vanke's limit up, on April 29th, real estate stocks collectively strengthened. On the A-share market, more than ten real estate stocks including China Jinmao, Huaxia Happiness, Rongsheng Development, and Jingrui Properties hit the trading limit up; on the Hong Kong stock market, nearly ten real estate stocks including Shimao Group, Sunac China, China Aoyuan, and Hopson Development surged by over 20%.

TF Securities believes that the real estate sector has rebounded significantly for two consecutive days, influenced by the optimistic views released by foreign institutions and the substantial cancellation of home purchase restrictions in Changsha and Chengdu recently, reinforcing expectations of relaxation.

Zhang Dawei, Chief Analyst at Centaline Property, stated that the main reason for the collective surge in real estate stocks is the market's anticipation of directional changes in real estate policies.

Furthermore, John Lam, Chief Analyst for Real Estate Research at UBS Greater China, recently stated that the Chinese real estate industry is preparing for a slow recovery, with sales area and price declines expected to ease this year, and house prices and new construction rates expected to stabilize before the middle of next year.

As a star analyst, John Lam's shift from a pessimistic attitude towards the Chinese real estate market over the past three years to a more optimistic one has undoubtedly brought a different vibe to the sensitive capital markets.

CITIC Securities believes that the first quarter of 2024 is the most challenging period for the fundamentals of the real estate market, but it is also a moment to welcome a policy turning point.

Xiao Lisheng, a researcher at the Institute of World Economics and Politics of the Chinese Academy of Social Sciences, also stated that signs of a bottoming out in the Chinese real estate industry are gradually emerging.

"A new home sales area of 1 billion square meters should be a normal level. In other words, the current real estate supply and demand are tending towards balance, and the market will see a relatively stable recovery," Xiao Lisheng said.

According to data from the National Bureau of Statistics, in the first quarter, the sales area of new commercial residential buildings was 230 million square meters, a year-on-year decrease of 19.4%, and the sales value of new commercial residential buildings was 2.1355 trillion yuan, a year-on-year decrease of 27.6%, but the decline rates have narrowed.

With recent comprehensive relaxation of home purchase restrictions in Chengdu and Changsha, and the resumption of home purchase and settlement in Nanjing, many places are expected to follow suit with policies to loosen the property market, tailored to local conditions, and the policy effects will gradually show.

CITIC Securities predicts that major cities' home purchase restrictions are expected to be further relaxed, and mortgage interest rates will continue to decline.

In the context of a weak industry recovery, the capital market's sprint embodies people's expectations and aspirations for industry changes. Despite the industry's difficulty in returning to the bustling era, the trillion-dollar market can still accommodate many players and investors to showcase their skills