发帖
雷达卡
Feeling bubbly?
Things are clearly becoming more expensive in China. The question for
investors is, are these price increases a good thing or a cause for concern? In
other words, is China experiencing asset-price inflation that will help pull the
economy out of its 2H08 doldrums and generate healthy returns on
investments, or are mainland property and equity prices in a bubble that will
soon burst, wiping out investors?
In our view, we are in the early stages of a long-running, moderately paced
inflation cycle in residential real-estate prices in China. Sales volumes have
begun to slow, while prices rose 4.1% YoY in August and 1.3% in July after
falling for nine consecutive months.
China’s property market is now growing at a healthy, sustainable pace, driven
by fundamental demand. Almost no mortgages are “underwater” and the
average loan-to-value ratio in China is 46%, compared to 76% in the US.
Bank exposure to China’s property sector is relatively modest, at 16.5% of
total outstanding loans.
China’s domestic stockmarket also does not look bubbly. After climbing
sharply in the first seven months of the year, A shares have been weak since
early August. The Shanghai index also does not appear significantly
overpriced, on 20x 09E PE and 16x 10E PE, or about 18x forward PE, which is
in line with the historical-average PE. As was the case when the A-share
market crashed in early 2008, another steep fall would have a very limited
macro impact.
The economic recovery is clearly well on track, neither too hot nor too cold.
We believe Chinese leaders share this assessment, and will be making policy
choices designed to prevent overheating next year, rather than to slow GDP
growth beyond an annual pace of about 8%.
In other words, withdrawing stimulus - both credit and infrastructure
spending - but not “tightening”. We expect 2H09 and 2010 lending to be
pared back significantly from the 1H09 peak, but credit flows should continue
to be strong enough to qualify as “loose”. Our conclusion is to maintain our
long-standing GDP forecast for this year of about 8%, although clearly the
risk has shifted to the upside. For 2010, we believe Beijing will continue to
reduce the level of stimulus in balance with a recovering private sector and
consumer, so that the stimulus does not push growth up above 8%. If,
however, the US and Europe recover strongly, then a renewed net-export
contribution could take China’s GDP growth up to 9% next year.
The key risks to our forecast are policy mistakes by Beijing - prematurely
applying the brakes to growth - and corporate profit growth, which will be
challenged by rising input and wage costs next year.
Contents
Executive summary ............................................................................ 3
Asset price inflation vs bubble ........................................................... 4
Residential real estate........................................................................ 6
A-share bubble? ............................................................................... 15
China’s policy choices....................................................................... 19
Risks and opportunities.................................................................... 32
提升卡
置顶卡
沉默卡
变色卡
抢沙发
千斤顶
显身卡
京公网安备 11010802022788号
