SHANGHAI - China's banking stocks may rise a further 20 percent this year and property developers are "attractive" even after the central bank boosted lenders' reserve requirements on Sunday, according to Franklin Templeton Investments' fund management unit.

Rising net interest margins for banks and the "low valuation" of property stocks make them a "good choice to buy", said Pan Jiang, a Shanghai-based portfolio manager at Franklin Templeton Sealand Fund Management Co Ltd, which oversees the equivalent of more than $2.6 billion.

"For the short term - like six months or by the end of the year - banks and other low-valuation stocks will see a further 15 percent to 20 percent gain," Pan said. "China's banks have strong pricing power. The property sector is facing tightening measures, but the valuation is at a low level. We're very optimistic about China's stock market."