Chinese property stocks rally in bailout – RT Business News

0
2
Chinese property stocks rally in bailout - RT Business News
google news

Regulators revealed financial measures that would help the sector avoid a credit crunch

Chinese property stocks and bonds rose sharply on Monday as banking regulators revealed a 16-step support package for the indebted sector.

Financial measures aimed at increasing liquidity in the real estate sector have been hailed by some analysts as a “turning point” and pushed the real estate index to its highest level in two months.

The Hang Seng Mainland Properties Index jumped more than 16%, while Hong Kong-listed Country Garden, one of China’s largest developers, gained more than 36%. Share prices of many other Chinese property developers also saw double-digit gains.

The bailout comes as the cash-strapped real estate sector, which accounts for a quarter of China’s economy, grapples with defaults and stalled projects, undermining market confidence and dampening the growth of the world’s second largest economy.


Chinese Auto Brands Lead Major Expansion In Russia – Report

According to some media, the 16-point relief plan presented by the People’s Bank of China (PBOC) and the China Banking and Insurance Regulatory Commission (CBIRC) includes loan repayment extensions. Regulators will extend a year-end deadline for lenders to cap their share of real estate lending.

The Financial Times reported, citing a document signed by the PBOC and CBIRC, that lenders “now have an indefinite period to limit the share of their outstanding mortgages with major banks to 40% of total loans and their outstanding mortgages to 32.5%.”

The move is expected to ease pressure on the industry, avoiding a credit crunch, and could affect 26% of China’s total lending.

Citi said in a note that the package signals a major shift in Chinese regulators’ policy toward developers of “impose restrictions” on “provide support”, and “save projects, but not developers” at “saving both developers and projects”.

For more stories on economics and finance, visit RT’s business section

You can share this story on social media:

RT

google news
Previous articleBiden and Xi meet amid efforts to ease tensions between their nations
Next articleTax winter is coming: 5 cold hills lawmakers need to climb