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Investing.com-- Chinese property stocks fell on Thursday as major developer China Vanke (SZ:000002) sought to restructure some of its debt, sparking renewed concerns over a debt crisis in the long flailing sector.
Vanke’s Shenzhen shares tumbled more than 6%, tracking an extended slump in the company’s bond prices. Hong Kong-listed peers including Sunac China Holdings Ltd (HK:1918), Shimao Property Holdings Ltd (HK:0813), New World Development Co Ltd (HK:0017), Longfor Properties Co Ltd (HK:0960), and Sunac China Holdings Ltd (HK:1918) fell between 0.5% and 5%.
Vanke disclosed late-Wednesday it will seek bondholder approval to delay repayment of a 2 billion yuan ($282.6 million) onshore bond, sparking renewed anxiety over a debt crisis in China’s property market.
Vanke stands to be the latest and potentially largest domino to fall in China’s beleaguered property sector, following high-profile defaults by private developers Evergrande and Country Garden over the past five years.
The state-backed real estate developer’s bonds slumped this week, with several notes hitting record lows on concerns that the company was seeking a restructuring of its debt. The news also sparked questions about how Beijing plans to support the beleaguered sector, which has been in freefall since the COVID-19 pandemic.
China has drastically loosened lending conditions, cut mortgage rates and also relaxed restrictions on investment to help shore up property prices, to limited effect.
Reports last week said Beijing was preparing more support for the real estate market.