(Bloomberg) -- As Sun Hung Kai Properties Ltd. shares hover around a 15-year low, investors are seeing little need to hedge against more declines. 

The number of bearish options on the stock is at its lowest level since 2015 relative to bullish contracts, data compiled by Bloomberg show. At the same time, the cost of protecting against a 10% slide in the Hong Kong developer’s shares in the next three months is near a two-year low relative to calls. 

The Hong Kong real estate market has been suffering in recent years. China’s crackdown on the sector, stringent policies during Covid and a weak economy amid high interest rates have all weighed on sentiment. 

While the city’s government removed all property cooling measures in February, the results have been mixed. New home sales are still struggling, though rental prices are back to their pre-pandemic levels.

The options data show “easing concerns towards Hong Kong developers, mainly due to expectation for lowering of interest rates, stabilizing property prices and improving sales, which is likely to be seen in the second half,” said Jeff Zhang, an analyst at Morningstar Inc.

Moreover, the Hong Kong Monetary Authority recently expanded its loan-to-value ratio cap to include residential mortgages for properties under construction. That could lead to lower earnings risk for developers, Bloomberg Intelligence analyst Patrick Wong wrote in a June 17 note.

SHK shares, down almost 40% from a high in January 2023, are trading at about eight times estimated earnings for the next year. That’s their lowest valuation since September 2022 relative to the benchmark Hang Seng Index. 

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