By Yi Wei Wong
Chinese property developers are up in early Tuesday trade after regulators stepped up support for the embattled sector with some measures aimed at broadening equity-financing channels.
Country Garden Services Holdings Co. rises 16%, Country Garden Holdings Co. jumps 8.6% and Longfor Group Holdings Ltd. advances 8.0% in morning trade.
The China Securities Regulatory Commission said in a statement Monday that it will now allow listed property companies to engage in share issuance, mergers and acquisitions, reorganizations and refinancing via non-public offerings, among other steps to help shore up the real-estate market.
The measures signal “a clear turn in policy direction and determination to support the sector,” Citi analysts said in a note.
The analysts expect share prices to continue to rebound in the near term, noting other supportive policy measures announced earlier this month. The People’s Bank of China and the China Banking and Insurance Regulatory Commission issued a joint notice earlier in November on financial measures aimed at supporting the stability of the country’s real-estate markets.
Despite these new measures, however, Citi thinks property sales could remain under pressure due to Beijing’s zero-Covid policy and weakened demand amid the country’s economic slowdown.
The property sector has been under severe stress as funding has become increasingly challenging amid defaults, operational inefficiencies and the government’s measure tightening last year.
Write to Yi Wei Wong at firstname.lastname@example.org