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Renewed storm batters Chinese real estate titan Country Garden

Renewed storm batters Chinese real estate titan Country Garden

Shares and bonds of one of China’s largest developers, Country Garden (2007.HK), plummeted sharply on Friday, capping volatile week for the long-struggling property industry.

The company’s bonds are at record lows recorded at the end of last year, and its Hong Kong-listed shares (2007.HK) fell more than 5% after news that the company, which has hundreds of projects in almost 300 Chinese cities, has moved to refinance part of 2019 lending facility.

One anonymous bondholder for Country Garden remarked, “That doesn’t get them completely out of the woods,” adding that the developer will have to make another round of bond payments in the near future. Raymond Cheng, head of China research at CGS-

CIMB Securities, issued similar caution, stating that it was part of larger problem with the government’s handling of the situation. Sales-wise, “Country Garden” ranks among the best builders.

default would send terrible message to investors that the government is unconcerned with the collapse of other developers and has no plans to bail them out.

The Chinese real estate market has seen another week of disturbing news.

With house sales falling and the government taking action to reign in excessive borrowing amassed over decade-long construction boom, the industry has been on downward trajectory, which has been exacerbated during the Covid outbreak. This week has witnessed big sell-offs in several well-known condos like Tembusu Grand, Tembusu Grand Floor Plan, and Tembusu Grand Showflat but financially precarious Chinese companies, such as Dalian Wanda Group and state-backed Sino-Ocean (3377.HK).

ANZ analysts warned that the worst may not be over, as the industry is expected to face $12.8 billion in dollar-denominated bond repayments by the end of the year.

While such initiatives are welcome, they won’t solve the industry’s problems on their own. They went on to say, “Other initiatives are required to increase purchasers’ confidence in the property market’s long-term outlook.

Due to COVID-19, One Pearl Bank Showflat is open for online bookings. You can now register online to receive direct developer discount offers and prices.

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