Chinese property developers surge in Hong Kong amid reports of government backing for onshore bonds
- Hang Seng Mainland Properties Index jumps by as much as 10.5 per cent, the most in five months
- CIFI Holdings and Longfor Group among the developers reported to be receiving government support
Chinese property stocks surged in Hong Kong on Tuesday following a report that regulators planned to support some developers’ yuan-denominated bonds, boosting sentiment in the crisis-hit sector.
The Hang Seng Mainland Properties Index jumped 5.8 per cent, the most in almost two months. Gains were led by CIFI Holdings, which rallied 12.9 per cent to HK$2.10. Longfor Group soared 12.4 per cent to HK$24.90, while Country Garden surged 9.1 per cent to HK$2.53.
Chinese regulators plan to instruct state-owned China Bond Insurance Co to offer liquidity support to a few private real estate developers by providing guarantees for onshore bond issuances, Reuters reported on Tuesday, citing four sources with knowledge of the matter. Longfor and CIFI were among the names listed for receiving help.
Gemdale Corporation, which was also on the shortlist, climbed 4.9 per cent to HK$0.64.
China Bond Insurance will provide “full amount, unconditional and irrevocable joint liability guarantee” to these medium-term notes, according to the Reuters report. Longfor recently sold three-year and five-year medium-term notes amounting to 1.5 billion yuan (US$220.8 million) backed by a guarantee from China Bond Insurance, according to the report.
