Shares of Chinese property developers dropped on Tuesday after another developer disclosed it had missed an interest payment and warned it might not be able to meet all offshore debt obligations.
Agile Group Holdings Ltd (HK:3383) fell as much as 15% in Hong Kong trading after announcing that the grace period for an interest payment on a $483 million senior note had expired on Monday without the payment being made.
In a filing, Agile stated it would continue to communicate with its creditors to find the “best possible” solution. The company also noted it had not received any notice for accelerated debt repayment from its creditors regarding the senior note.
Agile’s announcement adds it to the growing list of Chinese real estate firms struggling to meet debt obligations amid a prolonged property market downturn. Notable casualties include China Evergrande Group (HK:3333) and Country Garden Holdings Company Ltd (HK:2007), both of which are negotiating debt restructuring plans with creditors.
Other property developers, such as Powerlong Real Estate Holdings Ltd (HK:1238), Logan Property Holdings Co Ltd (HK:3380), Sunac China Holdings Ltd (HK:1918), and Wharf Real Estate Investment Co Ltd (HK:1997), saw their shares fall between 0.7% and 4.1% in Hong Kong trading on Tuesday.
The losses in property stocks contributed to the Hang Seng index trading sideways. However, recent declines also included some profit-taking, following a sharp rise in the sector over the past two weeks.
China recently loosened home buying restrictions in several major cities to stimulate the property market and counter the downturn in the sector, which contributes to at least a quarter of China’s overall GDP. Additionally, Beijing outlined plans for a substantial 1 trillion yuan ($138 billion) bond issuance set to begin this week.
China Vanke (HK:2202) was an outlier among its peers on Tuesday, with its Hong Kong shares rising 0.4% after local media reported that the property developer had recently secured substantial funding from multiple banks.
Paraphrasing text from "Investing" all rights reserved by the original author.
