(Bloomberg) — Growing signs of government support for the real estate sector are failing to shore up sentiment in the stock market.
A gauge of Chinese real estate stocks tumbled 3.1% on Monday to its lowest level since February 2017. Sunac China Holdings Ltd. plunged by a record 18% and Guangzhou R&F Properties Co. sank to a 16-year low. The moves came after banks cut borrowing costs for the first time in 20 months and authorities encouraged lenders to fund acquisitions of projects held by distressed developers.
While property stocks rose to recover some of their losses on Tuesday, the overall bearish sentiment suggests equity investors don’t hold out much hope for the survival of weaker property firms. Instead larger, state-owned firms are likely to benefit as they pick up projects at fire-sale prices. Poly Developments and Holdings Group Co. has climbed almost 6% in Shanghai this week.
Key Developments:
- Golden Wheel Tiandi Proposes Restructuring of Notes Due 22, 23
- Fantasia Extends Maturity Date for RMB949m of 7.5% Bonds to 2023
- Evergrande Land Seized by Chengdu City on Lack of Development
- China Chengxin Cuts Evergrande Onshore Unit Rating to B From BB
- Shinsun Cut to B3 by Moody’s; Ratings on Review for Further Cut
Evergrande Land Seized by Chengdu City on Lack of Development (6:37 p.m. HK)
The local government in western China’s Chengdu city took two parcels back without repaying the developers, saying that Evergrande failed to start construction on time, according to Dec. 17 statements from a Chengdu land regulator.
One site, sized 83,997 square meters, was sold to a firm fully owned by by Evergrande’s onshore subsidiary Hengda Real Estate in 2010, according to a statement and corporate registry search platform Qichacha.
Another site, sized 258,667 square meters, was sold to a developer in 2002 and transferred to another Hengda unit in 2011, according to a separate statement and Qichacha.
China’s RiseSun Said to Weigh $1.6 Billion Battery Unit Sale (5:48 p.m. HK)
Chinese real estate developer RiseSun Holdings Co. is considering a potential sale of a unit that makes electric-vehicle batteries, according to people familiar with the situation.
The company is working with an adviser to identify prospective buyers and is seeking as much as 10 billion yuan ($1.6 billion) for RiseSun Mengguli Power Technology Co., the people said, asking not to be identified as the information is private.
RiseSun is also weighing other options, including selling a stake in RiseSun MGL to raise fresh funds, the people said. Negotiations are ongoing and there’s no certainty the talks will result in a transaction, they added.
A representative for RiseSun declined to comment.
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