Country Garden Holdings’ shares and bonds jumped as news that the distressed Chinese builder will make it onto a draft list of firms eligible for financing support relieved concerns over liquidity woes.
Shares in Hong Kong rallied 24 per cent on Nov 23 to cap their best day in a year. Its 5.625 per cent dollar bond due 2030 gained another 10 per cent after jumping 40 per cent in the previous session, according to Bloomberg-compiled data. The developer’s dollar notes still trade around eight cents on the dollar, a deeply distressed level. A gauge tracking property developer shares advanced almost 9 per cent.
The authorities have been taking more forceful steps to end the nation’s property crisis, with the expected inclusion of Country Garden in the so-called “white list” showing Beijing’s pivot towards helping troubled builders. Country Garden’s plunge into default in October shook investor confidence as it showed few builders will be spared from the years-long housing market slump plaguing the economy.
China’s plan “underscores the importance it places on developers completing projects, and will help reassure suppliers, workers, and home buyers amid ongoing financing challenges”, said DBS Group Holdings strategist Chang Wei Liang. “Debt investors could still face risks of restructuring, but there is some relief if financing helps to ward off risks of liquidation.”
Sino-Ocean Group and CIFI Holdings Group, which have also missed debt payments, are among the 50 developers on the list, Bloomberg reported on Nov 22. Regulators are set to finalise the roster and distribute it to banks and other financial institutions within days, according to people familiar with the matter.
Denne historien er fra November 24, 2023-utgaven av The Straits Times.
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Denne historien er fra November 24, 2023-utgaven av The Straits Times.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
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