China's property market experienced turbulence as policymakers consider easing restrictive measures. Following a broad rally driven by top leaders' commitment to boost the economy and domestic demand post-COVID, investors eagerly anticipate support measures for the embattled sector. Amid mounting concerns over debt crises among state-backed developers like Sino-Ocean Group and Greenland Holdings, as well as property giants Country Garden and Dalian Wanda Group, uncertainty looms over the market's future.
Chinese property developers' stocks and bonds experienced a surge in demand last week, recovering from a significant decline in the previous trading session. This rally was triggered by policymakers' reassurance to provide increased support to the troubled sector.
In response to the positive news, Hong Kong's Hang Seng Mainland Properties Index soared by 14%, and the CSI 300 Real Estate benchmark rose by 8%. As a result of this latest upswing, the real estate sector indexes in China are poised to record their first monthly gain after facing substantial losses over the past four months.
Property behemoth Country Garden and its management unit Country Garden Services, both publicly traded in Hong Kong, experienced a remarkable recovery, with their stocks rebounding by 18% and 26.5%, respectively. These gains more than compensated for the significant declines they faced on the previous Monday.
In addition to the impressive stock rebounds, Country Garden's May 2025 dollar bond showed strength, reaching 21.675 cents on the dollar compared to 15 cents on the previous Monday evening. Meanwhile, their bond traded in Shanghai surged by 25% to 38 yuan, and their Shenzhen-traded bond rose by an impressive 44% to 33.6 yuan.
The notable market-wide surge was driven by China's top leaders, who made a commitment to enhance policy support for the economy in the aftermath of the challenging post-COVID recovery phase. The focus of their efforts is on boosting domestic demand.
Regarding the property sector, the Politburo, a high-level decision-making body of the ruling Communist Party, emphasized the importance of adapting to significant changes in market supply and demand promptly. This indicates their intention to implement timely policies to address the evolving situation.
Investors honed in on a particular shift in tone that hinted at imminent measures to stabilize the property market, despite the lack of detailed information about the support measures.
As a result of this positive sentiment, the gains in the property sector were widespread. Companies such as Sunac China saw a 17% increase in their shares, Longfor Group surged by 23%, and both Seazen Group and the KWG Group experienced soaring gains of over 25%.
In Shanghai, Sino-Ocean Group's onshore bond experienced a notable 8.6% rise, reaching 23.5 yuan. The state-backed company is currently in discussions with creditors to extend the repayment for the yuan bond scheduled to be due on August 2.
Meanwhile, holders of a $400 million bond issued by Wanda Properties Overseas received their payments on the bond, which had matured on the previous Sunday. Although the overall statement from the Politburo surpassed the market's low expectations, there was a sense that any further easing in the property sector would likely be modest and could
In the past weeks, investors had grown cautious due to signs of a worsening debt crisis in the property sector, particularly concerning state-backed developers like Sino-Ocean Group and Greenland Holdings, as well as industry giants Country Garden and Dalian Wanda Group.
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