The Gulf Time Newspaper One of the finest business newspapers in the UAE brought to you by our professional writers and editors.
BLOOMBERG
Chinese property stocks tumbled to close at the lowest level in 14-years, as weak home sales and rising debt woes for major developers deepened.
A Bloomberg Intelligence gauge of developer shares fell 2.5% on Wednesday, with China Evergrande Group and Times China Holdings Ltd leading the decline. The gauge has plunged 44% so far this year, outpacing major benchmarks onshore and in Hong Kong.
Pressure is mounting after Country Garden Holdings Co, China’s former top builder, signalled it is headed for a first-ever default as a grace period to meet an interest-payment deadline ends. Weak property investment and sales, which was a laggard during an otherwise upbeat Chinese economic data release, highlights the need for stronger measures to contain an unprecedented housing crisis.
“The market is turning more bearish with Country Garden’s potential dollar bond default,” said Patrick Wong, a Bloomberg Intelligence analyst.
The future of the industry “really depends on any further easing measures to support the housing market.”
Country Garden, which is at the center of China’s property crisis, must pay $15.4 million coupon on a dollar bond by the end of a 30-day grace period October 17-18 or a default can be called. The company hasn’t clarified which day marks the official end of the period, given the initial missed deadline of September 17.
Meantime, Evergrande faces the once-unthinkable possibility of asset liquidation on October 30 when a key court hearing takes place.