A clear winner is emerging among Chinese equities this year, whether in Hong Kong or Shanghai: real estate. Property firms account for eight of the 10 best performers on MSCI Inc.’s gauge of offshore Chinese shares in January, while developers have rallied the most among industry groups on the Shanghai benchmark. Shimao Property Holdings Ltd. has led the charge in Hong Kong, surging 28 percent, while China Vanke Co. has climbed 22 percent.
Behind the optimism are bets that sales will rebound and local governments will loosen restrictions that were aimed at cooling home prices, according to Credit Suisse Group AG, which said mainland Chinese investors were keen on Hong Kong-listed Chinese developers. Relatively cheap valuations were another draw, according to Credit Suisse. Shimao trades at 10 times reported earnings, while Vanke has a multiple of 14.6.