In Hong Kong (Reuters) – Chinese real estate stocks increased while stocks of Drop An Insurance Group fell to a low point in the last year on Wednesday succeeding a report from Reuters that Chinese authorities warned the company about acquiring a dominant stake in distressed developer Country Garden. Stated.
Thank you for reading this post, don't forget to subscribe!Drop An’s shares on the Hong Kong market dropped by 5.4%, marking their sharpest daily plunge in over a year, wiping out around $2.1 billion in market capitalization. The turnover was the highest in almost a year.
country garden <2007.HK> observed a one-month high in shares and closed over 12% higher. Its dollar debt also surged.
A representative from Drop An affirmed that the government had not made contact with the company and disapproved the information disclosed by Reuters, mentioning four sources familiar with the strategy.
However, the markets perceived it as a favorable indication for the debt-ridden real estate sector, which is exerting immense pressure on the second-largest economy in the world and instigating concerns of broader financial system spread.
Real estate giants China Evergrande and Sunac China Holdings leaped by nearly 30% each. The index of mainland developers listed in Hong Kong surged by 2.7%.
“Such a step is anticipated to diminish or manage market hazards,” stated Lu Wenxi, analyst at property agency Centline.
“This step will significantly boost market assurance, since now the entire real estate market, especially some major real estate corporations, are under tremendous pressure, and the possibility of them going bankrupt is setting off a chain reaction.”
In debt markets, some of Country Garden’s shorter-term bonds, such as a dollar bond maturing as early as 2024, were more robust at about 6 cents on the dollar, up 2 cents on the dollar.
Elsewhere, a Wanda Properties dollar bond maturing in early 2024 was up more than half a cent at $50.75.
(Reported by Anne Marie Rowntree in Hong Kong. Further reportage by Tom Westbrook in Singapore; Editing by Edmund Clamons and Kim Coghill)
Source: ca.finance.yahoo.com
