Morgan Stanley Downgrades China’s Property Sector on Policy Risk
- Broker downgrades industry to “in-line” from “attractive”
- Expects further policy tightening in cities, more deleveraging
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Morgan Stanley downgraded its outlook on China’s property sector amid risks policy makers may take steps to cool down the overheated market and further prompt developers to cut their debt levels.
The U.S. brokerage lowered its recommendation on the real estate sector in the world’s second-largest economy to “in-line” from “attractive” in a note published Thursday. Strong sales continue and land sales “haven’t cooled off yet, therefore policy risk is still to the downside,” analysts led by Elly Chen wrote.