Shares drop on Li warning, home sales tumble: Evergrande update

Despite policy makers’ pledges of support for the property market.
Image: Qilai Shen/Bloomberg

New-home sales in 23 major Chinese cities plunged 33% by area during a five-day national holiday compared with a year earlier, despite policy makers’ pledges of support for the property market.

Chinese shares fell after Premier Li Keqiang warned that the nation’s employment situation was “grave,” as Beijing and Shanghai tighten virus curbs. A Bloomberg Intelligence gauge tracking junk dollar notes dropped last week for the third time in the past four five-day periods.

Exports from China grew at the slowest pace in April since June 2020. They are “unlikely to turn around anytime soon with the government appearing to be firmly committed to a Covid Zero policy for now,” Bloomberg economist Eric Zhu wrote.

Key Developments:

  • China Stocks Drop Again as Li’s Warning on Jobs Adds to Concerns
  • China Stimulus Fails to Ignite Housing Sales Over Key Holiday
  • China Premier Warns of ‘Grave’ Jobs Situation Amid Lockdowns (1)
  • China’s Oceanwide Loses $410 Million Manhattan Site to Lenders
  • China Property Sector Sees Slower Loan Growth by End March

Li Keqiang Warning Hurts China Shares (2:23 p.m. HK)

Chinese shares fell after the premier warned that the employment situation was “complicated and grave,” deepening investor concern about economic damage from Covid outbreaks and strict curbs to contain them.

The CSI 300 Index slid as much as 1.4% as losses deepened in afternoon trading, although less than the 1.8% loss in the broader MSCI Asia Pacific Index.

China’s exports grew at the slowest pace in April since June 2020, customs data showed Monday, as worsening virus outbreaks crimped demand, undermined production and disrupted logistics in the world’s second-largest economy.

Guangzhou R&F Gets Nod to Delay Payment (10:53 a.m. HK)

Guangzhou R&F Properties Co. obtained investor approval to effectively delay repaying the majority of a 6.48% 400 million yuan ($60 million) bond that’s puttable Monday, according to a filing to the Shanghai Stock Exchange dated Friday.

Under the new arrangement, the developer will still pay the coupon due for the past year on Monday but reschedule payments for the remainder of the bond originally due in 2024.

New Home Sales Drop Over Holidays (8:19 a.m. HK)

New-home sales in 23 major cities tracked by China Real Estate Information Corp. fell 33% by area, adding to the pain this year, after combined sales at the top 100 developers halved in the first four months.

That’s despite the Politburo making sweeping vows to stimulate the economy and the top policy maker saying it would encourage “real housing demand,” in its clearest message condoning relaxation of property curbs.

Oceanwide Loses Manhattan Site to Lenders (8:15 a.m. HK)

Lenders have seized control of the property where China Oceanwide planned to develop one of lower Manhattan’s tallest towers.

Oceanwide defaulted on a $165 million loan on the project, at 80 South St., in January, leading to the transfer to a receiver as the property’s custodian, according to a filing by the developer’s Hong Kong affiliate. Oceanwide had invested $410 million in the project.

“The borrower has failed to pay all amounts demanded under the notice of default,” Oceanwide reported in the filing. “The company is continuously assessing the legal, financial and operational impacts of the actions to be taken by the initial lender.”

© 2022 Bloomberg

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