A Bloomberg Intelligence gauge of developer shares dropped as much as 2.5% on Wednesday. The biggest drag was CIFI Holdings Group Co., which tumbled 55% as trading resumed following a months-long suspension. The gauge is now down 37% for the year, compared with the broader Hang Seng China Enterprises Index’s about 10% decline.
The selloff has now erased all of the sector’s gains since China’s reopening rally took off at the end of October. Investors are bracing for further troubles at some distressed builders after policy support failed to drive a sustainable recovery in home sales. While developers are counting on the Golden Week holidays to revive sales momentum, a stream of negative headlines on the sector’s distress may keep buyers away.
Just this week, fresh drama unfolded at China Evergrande Group, with its restructuring process coming to a halt and its billionaire chairman put under police control. That’s as Country Garden Holdings Co. faces another round of interest payments on Wednesday, keeping investors on edge as they brace for a potential default by a major developer.
The crisis is threatening to push China’s economic growth to below Beijing’s target for the year. A new Bloomberg survey shows the economy is projected to expand 5% — a 10 basis point-downgrade from an earlier poll — with analysts citing property as the biggest challenge for the nation. The property market could take as long as a year to recover, according to a former central bank adviser, who’s urging Beijing to do more to encourage lending to developers to halt the spread of default.
Business Business Latest News, Business Business Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Source: KitcoNewsNOW - 🏆 13. / 78 Read more »
Source: KitcoNewsNOW - 🏆 13. / 78 Read more »
Source: BNNBloomberg - 🏆 83. / 50 Read more »