After Beijing showed the first substantive policy easing since the early days of the coronavirus pandemic, China’s real estate inventories surged, reassuring investors of the possibility of a default for a Chinese evergrande group of developers. I tried to make it.
Mainland Hansen’s real estate index rose 4.1 percent on Tuesday after the country’s central bank said so. Release Rmb1.2tn Liquidity of the banking system ($ 188 billion) by reducing the share of deposits that financial institutions must hold by 50 basis points.
According to national media, the Chinese Communist Party’s Politburo has also promised to maintain aggressive fiscal and “flexible” monetary policy next year.
These official announcements were made after last week’s announcement by the world’s most beloved developer, Evergrande. Have a hard time meeting With a previously undisclosed obligation of $ 260 million, it plunged its stake to a record low on Monday.
Evergrande also needs to meet the deadline for repayment of delinquent debt totaling $ 82.5 million. Otherwise, you run the risk of formal defaults.
A total of $ 343 million is equivalent to the value of the shares sold by the Evergrande chair at the end of last month. Xu Jiayin, Transactions that reduced the investment ratio in the group from 77% to 68%. Evergrande does not say whether Hui will use its earnings to pay off its debt.
After announcing the establishment of a risk management committee consisting of members of state-owned enterprises on Tuesday morning, the company’s stake rebounded by 8.3%.
“The key questions that come to mind for investors are whether the government is willing to change its policy stance on the real estate sector, how much it will change, and whether the change in stance really helps to turn the sector around. That’s what Chief Zhiwei Zhang said. An economist in pinpoint asset management.
The Hang Seng China Enterprises Index rose 1% on Tuesday due to lower reserve requirements at banks.
However, analysts said that the measures were reflected in the real economy. The real estate sector will soon After new data show that China’s real estate slowdown worsened last month.
“Liquidity is expected to bottom out in the second quarter of 2022 at the earliest,” said Griffin Chan, a Chinese real estate research analyst at Citigroup. He added that any mitigation would primarily benefit safer players in the real estate sector. Urgent need “Probably not enough” to make up for the shortage of real estate sales.
According to a survey by China Real Estate Information Corp, sales of the largest developer in China in November decreased by about 40% compared to a year ago. New home prices in 100 big cities have fallen slightly on average, according to data from the China Index Academy. After posting a slight rise in October.
Xingdong Chen, Chief China Economist at BNP Paribas Asset Management, said:
But he said, Chinese officials are likely to set an official growth target of 5.5% in 2022 and “introduce strong policy stimulus to reach it” at the party’s annual economic planning meeting this month. Added.
Additional report by Xinning Liu in Beijing
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