Snack China Holdings Ltd
On Tuesday, a real estate developer led a backlash against Chinese real estate stocks after a leak of government support requests was curbed and the country’s central bank announced support for the sector.
Hong Kong-listed Sunac said in an official social media account that the text was a draft by a representative of a company preparing to speak with local government officials in eastern Shaoxing. The draft was leaked after a representative accidentally shared it with a real estate chat group.
“Our company has never submitted a similar report to the government and has no need or willingness to do so. It can be misleading,” Sunac said on Tuesday. The company added that projects across China were functioning well and sales were strong.
Sunac’s share price surged 15%, reversing most of the plunge in the previous two sessions, which hit the company’s share price low in more than four years.
Many shares of Sunac’s rivals also skyrocketed, supported by notifications from the People’s Bank of China. The central bank said late Monday after a meeting of the Monetary Policy Committee that it would “maintain the sound development of the real estate market and protect the legitimate rights and interests of homebuyers.”
Country Garden Holdings shares Ltd
, China Vanke Ltd
And China Overseas Land and Investment Ltd
Everything jumped about 6% to 7%.China Evergrande,
Real estate giants, which are lagging behind in payments to international bondholders, also rose by nearly 5%. The share of the entire sector has been volatile recently.
Bruce Pan, head of macro and strategic research at China Renaissance Securities, said investors are positive about the central bank’s message that authorities can fine-tune real estate policy to maintain financial and social stability. It was interpreted as a signal.
Beijing is unlikely to reverse the crackdown, but it could ease mortgage restraints and lead to restructuring of some major real estate companies, Pan said.
Despite the rally on Tuesday, Carlos Casanova, senior economist for Asia at Union Bancare Prive, said he remained cautious in the sector.
“Some of these companies have better fundamentals, but they are exposed to the risk of sector transmission from Evergrande, a macroprudential rule to reduce leverage, and curb house price speculation. It’s also influenced by top-down driving, “said Casanova.
“On the debt side, we expect the sector to contribute to increased volatility as it faces high debt maturities from the rest of the year to 2022.”
Sunac’s dollar bonds have also recovered to some extent from Monday’s levels. According to Tradeweb, a batch of 7% bonds due in July 2025 was estimated to be about 84 cents for $ 1 by noon. They were quoted at the beginning of the month for over 98 cents in dollars.
—Frances Yoon contributed to this article.
Write to Yu.Xie@wsj.com’s Xie Yu
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Sunac Leads Rebound of Chinese Real Estate Stocks
Source link Sunac Leads Rebound of Chinese Real Estate Stocks