HONG KONG- Shares of Chinese property developers rose on Tuesday after regulators extended some policies in a rescue package introduced in November to shore up liquidity in the embattled sector.
Analysts said while the extended policy could ease the short-term financial pressure on property developers and ensure their home project completions, new measures would be needed to tackle the cash crunch in the sector.
The sector has been hit by many company defaults amid a debt crisis since mid-2021, triggered by non-repayments of China Evergrande Group the world’s most indebted property developer.
The central bank on Monday said it would give developers an extra 12 months to repay loans due this year, with many private firms still struggling to access new capital despite policymakers’ aggressive support measures.
Markets expect more stimulus to be rolled out soon.
Hong Kong’s Hang Seng Mainland Properties Index gained 1.8 percent, while China’s CSI 300 Real Estate Index edged up 0.1 percent.
Sunac China Logan Group and KWG Group listed in Hong Kong were among the top gainers, rising 4 percent-5 percent.
Last November, the People’s Bank of China (PBOC) put in place 16 measures to support the cash-strapped sector, including loan repayment extensions, to ease a deepening liquidity crisis.
On Monday, the PBOC said it would allow loans due this year to be repaid before the end of 2024. – Reuters
