Bloomberg News 7/5/2023
Fresh signs emerged Wednesday that China is facing yet more challenges in its property debt crisis.
Defaulted developer Shimao Group Holdings Ltd. failed to find a buyer for a $1.8 billion project at a forced auction, even at a heavy discount. Sino-Ocean Group Holding Ltd. saw its bonds tumble on news that the state-backed builder told some creditors it’s been working with two major shareholders on its debt load.
They’re the latest indications that China’s two-year real estate crisis is likely to remain one of the biggest drags on the world’s second-largest economy. A brief rebound after the nation scrapped Covid restrictions has quickly faded, with home sales resuming declines and property investment worsening — hurting markets ranging from iron ore to high-yield bonds.
“Investors are disappointed with the slow recovery of the housing market,” said Anitza Nip, Union Bancaire Privee’s head of fixed income research for Asia. “The recovery path appears to be even longer than what the market had initially anticipated earlier this year.”
The nation’s second-largest developer by sales, China Vanke Co., said last week that the home market is “worse than expected,” joining a chorus of investors and analysts who have become bearish on the sector. Goldman Sachs Group Inc. recently raised its projected default rate for Chinese high-yield property dollar bonds.
More:
https://finance.yahoo.com/news/china-property-pain-worsens-failed-080057006.html
