All articles tagged with #property sector
China's central bank kept its benchmark lending rates steady for the seventh consecutive month despite weak economic indicators and a prolonged slump in the property market, as the country faces deflationary pressures and aims to support growth through government bonds and policy measures.
Despite Vanke's bond repayment issues causing concern, Chinese stocks, especially in the tech sector, continue to rise, with technology now being the main market driver and property playing a minimal role, supported by strong earnings and government initiatives.
China's Q1 GDP growth of 5.3% y/y exceeded expectations, supported by policy measures, but March data revealed feeble domestic demand. Analysts emphasize the need for more stimulus to bolster demand, as the economy grapples with a protracted property downturn, mounting local government debts, and weak private-sector spending. The government aims for around 5% GDP growth in 2024, but Fitch's negative outlook on China's sovereign credit rating and weak March indicators underscore ongoing challenges.
Chinese developer Shimao Group is facing a liquidation petition from China Construction Bank (Asia) in Hong Kong over unpaid debts of HK$1.58 billion ($201.75 million), marking a rare case of a state-owned bank taking such legal action in the property downturn. Shimao, which is among the many Chinese developers that have defaulted on offshore bonds, is aiming to restructure about $11.7 billion of offshore debt, with an aim of cutting it by 60%. The company's Hong Kong-listed shares ended down 18.7% at a record low, and the first court hearing for the liquidation petition is scheduled for June 26.
China's official purchasing managers' index (PMI) rose to 50.8 in March from 49.1 in February, marking the first expansion in manufacturing activity in six months, with new export orders breaking an 11-month slump. Despite the modest pace of growth, recent upbeat indicators suggest the economy is slowly recovering, leading analysts to upgrade their growth forecasts for the year. However, a deep slump in the property sector remains a major drag on growth, prompting concerns about the need for more stimulus to achieve the ambitious 2024 economic growth target of around 5%.
China's industrial output and retail sales exceeded expectations in the first two months of 2024, providing hope for policymakers aiming for a 5.0% GDP growth target, despite ongoing weakness in the property sector. While the Lunar New Year holiday boosted consumer spending, analysts believe sustained robust consumer spending may be challenging without further stimulus. The protracted crisis in the property sector remains a major concern, with declines in property investment and poor demand. To achieve its growth target, more policy easing, particularly in fiscal, housing, and consumption, is deemed necessary. Additionally, China faces structural challenges in its economy, and there are concerns about potential stagnation if steps are not taken to reorient the economy towards household consumption and market-allocation of resources.
A liquidation petition has been filed against Chinese developer Country Garden for non-payment of a $205 million loan, adding to China's property sector woes and undermining Beijing's efforts to restore confidence in the industry. The petition, filed by a creditor, could cloud the developer's debt revamp prospects and exacerbate the real estate crisis, putting strain on its lenders and potentially delaying the recovery of the Chinese economy. Country Garden's shares were trading down 11% following the news, and the company has stated it will "resolutely" oppose the petition.
China's Country Garden Holdings received a liquidation petition from creditor Ever Credit Limited for non-payment of a 1.6 billion Hong Kong dollar loan, leading to a more than 12% drop in its Hong Kong-listed shares. The troubled property developer intends to vigorously oppose the petition and seek legal measures, with a court hearing set for May 17. This development adds to concerns about China's struggling real estate sector, which has been grappling with debt issues and defaults among major developers like China Evergrande.
China is set to implement a "project whitelist" mechanism to expedite issuance of project loans from banks for residential projects in 35 cities, aiming to ease a liquidity squeeze in the real estate sector. However, banks' reluctance to extend fresh credit to struggling real estate firms due to concerns about asset quality and the impact of the debt crisis remains a major obstacle. The mechanism may prioritize state-owned enterprises' projects, while privately owned developers are also seeking financing support. The success of the latest financing support measure is uncertain, and some industry experts believe that more comprehensive stimulus policies are needed to restore confidence in the property sector.
A Hong Kong court ordered the liquidation of China's Evergrande Group, triggering an implosion in the company's shares and bonds while causing a surge in the rest of the property sector as the market cheered the removal of the most problematic entity. Offshore creditors remain nervous, but analysts foresee a dose of reality in future restructuring proposals and expect a stimulus package from Chinese authorities to stabilize the sector. The liquidation order is not expected to significantly dent risk sentiment towards China credits, and Evergrande's peers are likely to be more sincere in discussing restructuring details with creditors to avoid a similar fate.
A Hong Kong court has ordered the liquidation of Evergrande Group, a troubled Chinese property-development giant, after it failed to reach a restructuring deal with creditors. This decision is expected to further weigh on China's economy, with real-estate investment declines already impacting GDP growth. Chinese stocks have tumbled amid concerns about the property sector, sluggish growth, and U.S.-China relations. Analysts anticipate continued policy easing by Beijing to counter these economic headwinds, with a focus on maintaining currency stability.
A top executive of China Evergrande's electric vehicle company has been detained by police, signaling further trouble for the heavily indebted property developer. The company's shares sank after the announcement, and news of a major shadow bank's bankruptcy liquidation added to the distress in the property sector. Evergrande, facing a $340 billion debt, is in the midst of a restructuring and its chairman's status is unclear. The company's EV unit's troubles could complicate its restructuring efforts, and a Hong Kong court is set to hold a hearing on its debt restructuring plans. Meanwhile, Zhongzhi Enterprise Group, a major shadow bank, filed for bankruptcy liquidation, highlighting the financial distress in China's property market.
China's property sector continued to weaken in November, with declining home buyer sentiment and indebted developers leading to lower sales and investment. Retail sector activity also fell short of forecasts, indicating the need for further support to boost demand. While industrial output grew faster than expected, analysts remain cautious about the overall economic recovery, citing deepening factory-gate deflation and the need for more effective policy transmission. The patchy recovery and structural slowdown have raised concerns that China may face Japanese-style stagnation unless policymakers prioritize household consumption and market-allocation of resources. Analysts suggest that additional stimulus measures will be necessary to sustain the targeted annual economic growth of around 5% in 2024.
Moody's Investors Service has raised concerns about China's debt troubles, drawing parallels to Japan's bubble-era crisis. The warning comes as China's default-plagued property sector and hidden debt pose significant risks. The country's prioritization of fiscal and monetary stimulus over structural reform is also worrying. China's deflationary environment and limited fiscal maneuverability further compound the challenges. While China has dismissed the downgrade threat, it must heed the lessons from Japan's past and take necessary measures to avoid a financial crisis that could have unprecedented global repercussions.
The liquidation hearing for China Evergrande Group, the world's most indebted property developer, has been adjourned to January by a Hong Kong court, providing more time for the company to finalize a debt restructuring proposal. Evergrande's lawyers requested the adjournment, stating that no creditors were actively seeking liquidation. The company's shares jumped over 13% following the announcement. Evergrande, with over $300 billion in total liabilities, defaulted on its offshore debt in 2021, becoming a symbol of China's property sector crisis. The company is working on a revised restructuring plan to avoid liquidation, but some creditors have expressed opposition and threatened to seek liquidation if the terms do not change.