Chinese property developers are hurting their stock prices as they seek to raise cash to service their debt and weather a historic funding squeeze.
Shares in Sunac China Holdings extended its slide as much as 12% after it raised about $ 953 million through the sale of new shares, as well as a stake in its property management unit. China Aoyuan Group slumped as much as 11.7% after it said it would sell Hong Kong properties at a loss. Pairs also fell as home price declines accelerated.
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Such moves showed how the drive for companies to pay off their debt can come at a cost to shareholders as bonds rose. Sunac dollar bills were indicated at around 6 to 9 cents more, according to credit traders. Chinese junk dollar bonds are also recovering further after their biggest gain in 20 months last week, following signs that the authorities will offer support to ease the liquidity crisis.
- China’s Junk Bonds Join Largest Weekly Rally Since March 2020
- Stressed Chinese developers sell stocks and cut cash dividends
- Chinese Developer Sunac Raises $ 953 Million; The president issues a loan
- Chinese developer Sunac is said to explore the sale of tourism assets
- More Chinese real estate firms plan to sell bonds on the interbank market
- Spills from China market to World Limited, says former adviser to the People’s Bank of China
- China analysts warn of risks to indebted developers: News
- Chinese developer Yango awaits verdict on debt extension offer
Greenland Jumps In Bond Market After Saying It Is No Longer A Real Estate Developer (3:22 PM HK)
The dollar bonds of the Chinese company Greenland rallied after a statement late Friday that the company would now be classified as operating in “construction” rather than “real estate.”
The reclassification comes amid lingering investor uncertainty over recent struggles in the real estate industry and a broader rally in Chinese junk dollar bills following signs of policy easing for the real estate industry.
China’s Developers See Bond Promise Risks Rising Amid Debt Crisis (2:48 p.m. HK)
Chinese developer Shanghai Shimao Co. continues to see increased stress on its local bonds, exchange-traded repo data shows. The pledge index for the issuer’s onshore bonds fell the most in the five trading days through Nov. 12, according to data compiled by Bloomberg. Yuan notes from Sunac Real Estate Group Co. were also among those that saw the ratio decline.
China’s exchange-traded repo market offers a way to monitor changes in domestic credit risk. The so-called commitment ratio determines the value that a note has when it is committed in cash, and declines in the metric can be a sign of weakening investor sentiment.
China’s domestic market woes deepen as prices and sales drop further (12:17 p.m. HK)
The housing decline deepened in October, adding pressure on authorities to stabilize the market. New home prices in 70 cities fell 0.25% last month from September, when they fell for the first time in six years, data from the statistics office showed Monday.
The figures may add to speculation that regulators will consider easing their crackdown on leverage in the real estate industry, as the real estate recession risks derailing China’s economic recovery.
China’s economy stabilizes as energy spending and supply increases (11:37 a.m. HK)
China’s economy performed better than expected in October as retail sales increased and power shortages decreased, partially offsetting the property decline.
Industrial production increased 3.5% in October from a year earlier, while retail sales growth accelerated to 4.9%, beating economists’ forecasts. The growth of investment in fixed assets moderated to 6.1% in the first 10 months of the year, compared to a forecast of 6.2%. The surveyed unemployment rate remained stable at 4.9%.
The better-than-expected numbers will be a relief after the economy’s momentum weakened in the second half of the year, with demand and supply under pressure. Beijing’s crackdown on the housing market has slowed lending to a sector that accounts for as much as 25% of gross domestic product, while power shortages have caused factories to slow down production.
China’s Developers Fall As House Price Slump Accelerates (10:11 a.m. HK)
Shares of Chinese property developers fell after official data showed that home prices in the country fell at a faster pace last month. The CSI 300 Real Estate Index fell as much as 3% and posted the biggest two-day loss in two weeks.
Sunac Dollar Bonds Jump 6-9 Cents After New Stock Sale (9:40 AM HK)
Sunac dollar bills were indicated at about 6 to 9 cents above the curve Monday morning, credit traders said, as the sale of shares helped boost bond prices. Its 5.95% dollar bill due 2024 is indicated with an increase of 7.7 cents on the dollar to 83.1 cents, based on prices compiled by Bloomberg at 9:35 a.m. in Hong Kong.
Stressed Chinese Developers Issue Stock, Cut Cash Dividends (8:51 a.m. HK)
Sunac China issued shares at a discount of more than 10% and borrowed $ 450 million from its billionaire founder. Kaisa eliminated its interim dividend and China Aoyuan sold investments in apartments and parking spaces in Hong Kong at a loss.
The search for cash by Chinese property developers accelerated over the weekend. While there are incipient signs of a thaw in the domestic credit market for some real estate companies, the dollar bond market remains closed for most lower-rated borrowers.
Yango extends the exchange offer deadline until November 17 (8 a.m. HK)
Yango Group has extended the expiration date for its dollar bond exchange offer and consent requests until 4 p.m. London time on November 17, according to a presentation by the Hong Kong Stock Exchange. The settlement of new notes, delivery of the exchange and consideration of consent to eligible holders is scheduled for or around November 23 according to the new schedule.
China Aoyuan to Sell Hong Kong Real Estate Assets for HK $ 900 Million (7:43 AM Hong Kong)
Aoyuan Property (Hong Kong), a unit of China Aoyuan, agrees to sell three real estate investment holding companies and the loan they owe to the unit for cash to private investor Norman Ng Tang Fai, according to the filing on the stock exchange. Hong Kong stock Sunday night.
The holding companies’ assets include apartments and parking spaces at Yin Yee Mansion on Robinson Road, Hong Kong Island. Aoyuan expected to recognize an estimated loss of around 176.6 million Hong Kong dollars ($ 22.7 million) from the sale. The company will use the net proceeds to repay the HK $ 600 million credit facility and general working capital.
Kaisa Group will not pay provisional dividends (7:35 am HK)
The board of directors of Kaisa Group Holdings Ltd. has resolved that the interim dividend will not be paid, it said in a presentation late Friday. The negotiation will remain on hold until further notice.
Cash-strapped Kaisa is trying to sell real estate assets with an estimated value of $ 12.8 billion. Its slow progress on disposals has increased the likelihood that it will default on interest payments on dollar bonds at some point, Fitch Ratings said in its latest downgrade last week, citing risks that include undisclosed debt from management products. equity and decrease in sales.
S&P Global Ratings said Thursday in its rating cut that “a default scenario is inevitable six months from now.”
Chinese Developer Sunac Raises $ 953 Million; The president issues a loan (7:22 a.m. HK)
Sunac raised about $ 953 million through the sale of new shares, as well as a stake in its property management unit, the latest Chinese developer to seek funding amid an industry-wide liquidity crisis. It sold 335 million shares at a price of HK $ 15.18 each, raising about $ 653 million, in a statement Sunday, confirming an earlier story from Bloomberg News.
Another $ 300 million came from the sale of 158 million shares in its property management division Sunac Services Holdings Ltd., through a subsidiary. Shares of Sunac Services were sold at HK $ 14.75, an 11% discount on Friday’s closing price.
China CBIRC to Maintain Stable Property Prices, Expectations (7:15 am HK)
China will continue to curb the “financialization of real estate” and prevent the sector from becoming a bubble, the banking and insurance regulator said in a statement late Friday. It will keep land and house prices stable, improve the long-term mechanism for real estate regulation and continue to intensify efforts to manage non-performing assets and regulate shadow banking, the statement said.
The PBOC says to maintain a stable and solid development of the real estate market (7:10 am HK)
The Chinese central bank will resolutely curb the monopoly and disorderly expansion of capital in the financial services sector, adding that it will maintain a stable and solid development of the real estate market, it said in a statement late Friday.
A look at Evergrande’s maturity schedule:
|Dollar bonds||Coupon expiration date||Grace period ends||Amount
(A million dollars)
|TIANHL 13% due 2022||November 6th||6th of December||41.93|
|TIANHL 13.75% due in 2023||November 6th||6th of December||40.56|
|EVERRE 7.5% due in 2023||December 28th||January 27th||50.43|
|EVERRE 8.75% due in 2025||December 28th||January 27th||204.77|
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