Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

China developers' rally loses steam after some companies flag risks

Stock MarketsDec 22, 2021 04:05AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters.

SHANGHAI (Reuters) -A recent rally in Chinese property stocks lost steam on Wednesday, after developers including Tahoe Group and Sichuan Languang Development Co (SS:600466) flagged investment risks, citing poor fundamentals.

China's CSI300 Real Estate Index lost 1%, after hitting a two-month high in the previous session. The gauge had rebounded almost 20% from its November low on signs Beijing is marginally easing real estate curbs to prevent a hard-landing.

China has since October urged banks to meet developers' "normal" funding needs, and allowed some real estate firms to issue more domestic bonds, fuelling hopes that Beijing is easing its deleveraging campaign against the sector. Regulators also recently showed support towards project acquisitions by big developers to aid weaker ones.

The recent rebound "is not backed by fundamentals," said Cai Hongfei, analyst at Central Wealth Securities.

"The government is still hoping troubled developers rescue themselves," he said, flagging that there will be a fresh wave of maturing debt next month.

Shares of Tahoe Group slumped 4.6%, having surged 21% over the past two sessions, after the company urged investors to pay attention to risks when investing in the company in an exchange filing.

After defaulting on 49.6 billion yuan worth of borrowing at the end of November, Tahoe also said in the filing it was seeking solutions through a debt restructuring.

Sichuan Languang, which has defaulted on local bonds since July, also said in a statement on Wednesday the company had made little progress in restructuring its debt.

Its stock tumbled 7.8%, having surged some 67% this month.

"Currently, the company's share price has sharply deviated from its fundamentals, and our business conditions continue to worsen," Languang said.

But some investors disregard companies' warnings.

Shares of Beijing Dalong Weiye Real Estate Development Co surged the maximum 10% allowed for any stock on the main board in China on Wednesday, bringing this month's gains to 82%.

The share jump came despite the company warning that its stock valuation is three times the industry average.

"We hope that investors pay attention to market risks, make rational decisions, and invest prudently," Dalong said.

China developers' rally loses steam after some companies flag risks
 

Related Articles

WeWork appoints Andre Fernandez as CFO
WeWork appoints Andre Fernandez as CFO By Reuters - May 26, 2022

(Reuters) - Flexible workspace provider WeWork Inc on Thursday appointed Andre Fernandez as its chief financial officer (CFO), replacing Benjamin Dunham. Fernandez, who most...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email