China’s Hubei halts some new property investments

Bloomberg

The state assets regulator in China’s Hubei province has asked companies backed by the province and their subsidiaries to suspend new property investments from September 5 amid a push to reduce financial risks, according to people familiar with the matter.
The State-owned Assets Supervision and Administration Commission in Hubei has also asked province-backed companies to accelerate the construction or sales of current property projects and get money back as soon as possible, said the people, who asked not to be named because they weren’t authorized to comment on the matter publicly.
The regulators made the decision because many of the companies face high debt ratios and rising funding costs, said the people, who didn’t name specific companies affected.
Shares of Wuhan East Lake High Technology Group Co., a property developer that manages industrial parks and develops high-tech products and whose controlling shareholder is a Hubei-backed investment company, fell 1.3 percent on Tuesday. Wuhan Yangtze Communications Industry Group Co., which is among the largest shareholders of East Lake, fell
1 percent.
China has embarked on a drive to reduce leverage in financial markets and rein in systemic risks ahead of the Communist Party Congress in October, a one-in-five years event where leaders are expected to outline their vision for the nation. Property has been among the targets of a regulatory crackdown amid soaring real estate prices and debt-fueled acquisitions by individuals and companies.