Chinese developer stocks jump on banks’ deposit moves

The increases came after banks in Heze, a city in eastern Shandong province, eased mortgage requirements for some home purchases.

Shares of Chinese developers rose on Friday after Finance Minister Liu Kun pledged increased fiscal support for the economy and an easing of down payment requirements for home purchases in several Chinese cities aimed at reviving the economy. demand.

The Hang Seng Mainland Properties Index, which tracks property developers, rose 4.6% on Friday – its strongest daily performance since November.

News of easing conditions for first-time buyers came in contrast to negative sentiment in the United States and Europe over tensions between Russia and Ukraine, which caused a sell-off on most Asian markets.

State-owned Poly Developments and Holdings climbed 5.4%. And in Hong Kong, the property index ended up 2.9%, led by a 5.3% rise in beleaguered neighborhoods. sunac China Assets.

Other indebted developers also won, like Shimao Holdings Groupwhich increased by nearly 3%.

The increases came after local media said banks in an eastern Chinese city – Heze in Shandong province – cut mortgage down payments in a bid to stimulate demand.

The Heze branches of the four largest public banks have all reduced the down payment rate from 30% to 20% for first-time buyers, the trade publication Caixin reported.

Caixin said Heze, formerly known as Caozhou, is the first Chinese city to take major easing measures targeting home buyers.

Hong Kong’s Hang Seng index fell 1% and most other Asia-Pacific markets fell on Friday, after heavy losses in the United States after the White House said Russia was on the verge to invade Ukraine.

AMC gets bond approval

In related news, East China Asset Management announced on Friday that it had received approval to issue up to 10 billion yuan ($1.58 billion) of bonds in the interbank bond market to address risks in the real estate sector.

China Orient is one of China’s four major asset management companies (AMC), or “bad banks”, originally created to get rid of non-performing loans from major state-owned banks.

Chinese financial regulators met with its major bad loan companies last month to explore how these AMCs can participate in developer asset sales.

The real estate sector has been battered by restrictions imposed last year on lenders and mortgage applicants in a bid to deleverage some of the huge debt held by builders such as China Evergrande.

  • George Russell and Jim Pollard

This report was updated with additional information on February 18, 2022.

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george russell

George Russell is a Hong Kong-based freelance writer and editor who has lived in Asia since 1996. His work has appeared in the Financial Times, Wall Street Journal, Bloomberg, New York Post, Variety, Forbes, and South China Morning Post. . .

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