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
08-14-23 0017ET
