Investors sell off Chinese real estate stocks

Pace intensified on concerns over Beijing’s intervention and weak real estate market data

National Weekend Edition /
Sep.September 19, 2021 09:00 AM
Hong Kong Stock Exchange (Getty)

Hong Kong Stock Exchange (Getty)

Investors continued to sell off shares in China’s real estate companies, wary of Beijing’s ongoing effort to stabilize the sector.

The Hong Kong Stock Exchange’s property index, which tracks 52 real estate companies, fell 4.9 percent on Thursday to close at its lowest level since 2017, according to the Wall Street Journal.

The Chinese government began watching the property sector more closely last year as concerns mounted over some developers’ heavy debt load.

China Evergrande Group has become the poster child for the indebted sector, with its stock price dropping by nearly 80 percent this year. The firm’s property wing posted a loss in the first half of the year for the first time since 2009.

The government hasn’t offered to bail out Evergrande, but would likely get involved to avoid a chaotic collapse of the company. The firm has the dubious distinction of being the world’s most indebted developer.

This year, the Chinese government limited loans to developers and barred private equity firms from investing in residential development.

Recently released economic data showing weakness in the sector is also motivating investors to sell off their shares in developers. The total value of home sales across China fell 19.7 percent year-over-year in August, the most since April 2020.

Hong Kong Stock Exchange’s property index — called Lippo Select HK & Mainland Property Index — has plummeted 23 percent this year as of Thursday, dragging down prices for shares of even investment-grade-rated firms like Shimao Group Holdings.

[WSJ] — Dennis Lynch 





    Related Articles

    arrow_forward_ios
    McDowell wants to build 201 apartments near Homestead, puts land under contract
    McDowell wants to build 201 apartments near Homestead, puts land under contract
    McDowell wants to build 201 apartments near Homestead, puts land under contract
    Renderings of Venus with Erik Rutter and David Weitz (ImageFiction)
    Carpe secures approval for North Miami Beach mixed-use apartment project
    Carpe secures approval for North Miami Beach mixed-use apartment project
    From left: Damien Barr and Ned Grace of NDT Development; Joe Furst of Place Projects; a rendering of the planned redevelopment of the Nora District in downtown West Palm Beach (ArquitectonicaGEO, Place Projects, NDT Development)
    West Palm developers secure capital partner for Nora District projects
    West Palm developers secure capital partner for Nora District projects
    (ONE Sotheby's Realty)
    Former mayor George “Bud” Scholl’s waterfront home hits market for $13.9M
    Former mayor George “Bud” Scholl’s waterfront home hits market for $13.9M
    Jackie Soffer with 2750 Northeast 199th Street (Google Maps, Turnberry.com)
    Jackie Soffer’s Turnberry proposes office/retail project near Aventura Mall
    Jackie Soffer’s Turnberry proposes office/retail project near Aventura Mall
    GL Homes President Misha Ezratti & Palm Beach County Agricultural Reserve (LILA PHOTO via GL Homes, County government of Palm Beach County, Wikimedia Commons)
    GL Homes scores a win with plan to build on preserved farmland
    GL Homes scores a win with plan to build on preserved farmland
    The $125 million Grove Central project going up next to the Coconut Grove Metrorail Station (RSM Design)
    Top 10 development projects in Miami-Dade in 2021
    Top 10 development projects in Miami-Dade in 2021
    Witkoff CEO Steven Witkoff, Monroe Capital CEO Theodore Koenig and 700 North Miami Avenue in Miami (Google Maps, Witkoff, Monroe Capital, Kobi Karp)
    Witkoff, Monroe plan three 57-story towers on Miami Worldcenter site
    Witkoff, Monroe plan three 57-story towers on Miami Worldcenter site
    arrow_forward_ios

    The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

    Loading...