Sun Hung Kai Properties shares fall, tension between China and the West increases

Hong Kong shares dropped down on Friday with property shares enduring a major hit. The real estate company Sun Hung Kai Properties Limited, along with Sino Land and Wharf Real Estate, suffered a drop of more than 6.6%.

In the past few weeks the tension between China and the U.S. intensified as the two countries continued blaming each other for the devastating coronavirus outbreak. Naturally, this led to the possibility of reigniting the trade war between the two economies.

On Friday, the Asian stock suffered its steepest decline for the past month. The Hang Seng Index (HSI) was the worst performer in this unfortunate situation with the biggest slump of shares in Asia.

On Wednesday, the U.S. Senate passed a bill that will prevent some Chinese companies from enlisting on Wall Street. The only way they will be allowed to list on U.S. exchanges is to follow the standard U.S. rules for audits and regulations.

China is planning to introduce a new security law for Hong Kong. This raised many concerns over the strengthening of Beijing’s grip on the autonomous territory. Although the special administrative region has been implementing the pattern of “one country, two systems,” China believes that recently there have been serious risks for national security.

The new law for Hong Kong may spark another wave of anti-government protests, which can further weaken the markets. The shares of the largest property developer in Hong Kong, Sun Hung Kai Properties, dropped on Friday, marking one of the biggest slumps in the last month.

On Friday, the Mainland China stocks also dropped, with the Shanghai Composite Index falling more than 1% and the Shenzhen Component Index plummeting 2.2%.

Analyst stock price forecast and recommendation

According to CNN Money, data collected from 15 analysts who offer 12-month price forecasts for Sun Hung Kai Properties Limited show a median target of $16.82, with a high estimate of $20.42 and a low estimate of $13.23. The median estimate represents a +35.62% increase from the last price of $12.40.

The same media also offers recommendations of 16 investing analysts who have participated in a Sun Hung Kai Properties Limited poll. Among the surveyed analysts, 11 rated the stock as “Buy” and 1 – as “Sell”. About 2 of the analysts gave the Sun Hung Kai Properties Limited stock a “Hold” rating and 2 believe it has an “Outperform” ranking.