China developer Country Garden shares extend losses on debt worries; others fall
2023.07.23 22:53
© Reuters. FILE PHOTO: Workers walk past a construction site of residential buildings by property developer Country Garden in Kunming, Yunnan province, China September 17, 2019. REUTERS/Wong Campion/File Photo
SHANGHAI/SINGAPORE (Reuters) -Shares and bonds in Chinese property developer Country Garden and its property service arm Country Garden Services Holdings tumbled on Monday, extending losses from the previous week on debt concerns.
More liquidity troubles surfaced in China’s property sector last week, sending down shares and bonds of the country’s biggest developers.
Country Garden Services Holdings shares slumped more than 10% on Monday, while Country Garden fell more than 5%, with both down to their lowest level since last November.
Two onshore-traded bonds of Country Garden, plunged roughly 20% each, and some of its offshore-listed bonds also declined.
The property firm’s move last week to refinance part of a 2019 loan facility failed to assure investors of its ability to repay debt due in coming months.
The Mainland Properties Index declined more than 3%, while the CSI 300 Real Estate Index dropped roughly 1.5%, even after China’s cabinet approved guidelines on transforming underdeveloped areas in mega-cities that analysts said would bolster developers.
The property sector, which accounts for about 25% of China’s gross domestic product, is on a downward trend. Home sales are slumping, and the government is moving to rein in unsustainable borrowing built up during a decade-long building boom.
Shares in other developers, including Longfor Group, China Overseas Land & Investment and Sunac China Holdings, also slumped on Monday.
