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A Bloomberg gauge of the nation’s developer shares jumped as much as 5%, extending a two-day advance to 11%, the most since March last year. Developers, including Gemdale Corp. and Jinke Properties Group Co., took six out of the top 10 slots in the CSI 300 Index Thursday. Short sellers unwinding their bearish bets also fuelled the rally.
Confidence in the sector has been lifted as a string of positive news emerged this week raising expectations the government may be relaxing restrictions on developers’ financing. Evergrande Group’s bond interest payment, which looks set to help the firm avert a default again, also provide investors with some reprieve.
Read: China State Media Stoke Speculation Property Crackdown May Ease
Dow Jones said China’s central bank is considering easing rules to help struggling developers sell assets to avoid defaults, after a similar report by local media Cailian. On Wednesday, the state-run Securities Times reported rules for developers to issue domestic bonds may be loosened.
If the changes get implemented properly, “the chance of hard landing of property market in China can be avoided,” CGS-CIMB analysts including Raymond Cheng wrote in a note.
Sunac China Holdings surged as much as 9.2% in Hong Kong, while China Evergrande gained 9.3%. China Merchants Shekou Industrial Zone Holdings Co. jumped by the 10% daily limit on the mainland.
©2021 Bloomberg L.P.
