One of China’s biggest property developers, Country Garden Holdings (ticker: 2007.Hong Kong), is scheduled to report first-half earnings on Wednesday after defaulting on interest payments on its bonds earlier this month.
The report may shed new light on how distressed the country’s property market is now. The sector has been hit by falling prices and declining sales. The turmoil is weighing on the wider economy amid a slower-than-expected recovery after the lifting of COVID-19 restrictions late last year.
Ahead…
One of China’s biggest property developers, Country Garden Holdings (ticker: 2007.Hong Kong), is scheduled to report first-half earnings on Wednesday after defaulting on interest payments on its bonds earlier this month.
The report may shed new light on how distressed the country’s property market is now. The sector has been hit by falling prices and declining sales. The turmoil is weighing on the wider economy amid a slower-than-expected recovery after the lifting of COVID-19 restrictions late last year.
Ahead of the results, Country Garden said it would issue about $35 million in new shares to free up cash. On Tuesday, Country Garden asked creditors for a 40-day grace period for onshore bond payments due on Saturday.
Separately, some Chinese state-owned banks will soon cut interest rates on existing mortgages for the first time since 2008, Reuters reported, citing unnamed people familiar with the plans. This follows a move by Chinese authorities to lower taxes on stock purchases earlier in the week.
All the measures are aimed at restoring the confidence of investors and consumers. The government has set a target of 5% economic growth this year, the lowest in decades, and it appears to be in danger of falling behind.
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The CSI 300 index of China’s onshore shares closed little changed, as did Hong Kong’s Hang Seng index. Country Garden fell 3.3% in Hong Kong, but the stock is still up 25% over the past five days.
Write to Brian Swint at [email protected]
Source: www.barrons.com
