Chinese Developers' Shares Slump on Country Garden News, Weak Credit Data
By Bingyan Wang
Shares of Chinese property developers fell sharply Monday, weighed by negative news, including property giant Country Garden's suspension of bond trading, deteriorating credit data and profit alerts.
Country Garden shares fell 15% on news that it was suspending the 2016 yuan bond from trading on the Shanghai Stock Exchange starting Monday as part of its efforts to resolve its liquidity problem.
Year-to-date, the stock has fallen 69% on the news about it missing $22.5 million in interest payments on its dollar bonds, and the company is expected to post its worst loss since going public 16 years ago.
Investors are speculating whether Beijing will rescue Country Garden given its scale and the impact on the economy as a whole of further defaults.
Country Garden's "credit distress is likely to spill over to the country's property and financial markets," analysts from Moody's said in a note.
Shares of another property developer, China Jinmao Holdings, fell 6.5% after being warned of an 80% drop in net profit, citing weakness in China's real estate market.
The weakness was felt on mainland exchanges, with China Vanke falling 2.8% and Greenland Holdings down 1.9%.
More broadly, any hope for a speedier economic recovery may be dashed after economic indicators for July continue trending downward.
July credit data came in well below market expectations, with new yuan loans at their lowest level since 2009, signaling a fall in consumer and entrepreneur confidence in spending and investing.
Write to Bingyan Wang at bingyan.wang@wsj.com
(END) Dow Jones Newswires
August 14, 2023 00:17 ET (04:17 GMT)
Copyright (c) 2023 Dow Jones & Company, Inc.-
Q3 2024 Stock Market Outlook: Is the AI Stock Trade Over?
-
Ian Bremmer: 4 Big Geopolitical Risks to Watch
-
What’s Happening In the Markets This Week
-
Obesity Drug Stocks: Why It Will Be ‘Exceptionally Difficult’ to Dethrone Eli Lilly and Novo Nordisk
-
What Does Chipotle’s Stock Split Mean for Investors?
-
5 Stocks to Buy Before the Fed Cuts Interest Rates in 2024
-
Markets Brief: Inflation Is Back In the Spotlight
-
What a Strong Economy Now Means for the Rest of 2024
-
10 Top Dividend Stocks for 2024
-
Finding Small-Cap Stock Opportunities In a Big-Cap World
-
The 10 Best Companies to Invest in Now
-
Nike Earnings: Dim Sales Outlook Slams Shares, but Patient Investors Could Be Rewarded
-
2 Top E-Commerce Stock Picks
-
Our Top Pick for Investing in US Renewable Energy
-
Micron Earnings: We Raise Our DRAM Forecast and Valuation Behind Stronger Pricing Assumptions
-
10 Undervalued Wide-Moat Stocks