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Mainland Chinese property shares surge on rumours authorities will back ‘financially healthy’ developers
- The Shanghai Stock Exchange Property Index jumped 3.5 per cent, while developers and suppliers rallied in Shenzhen
- Rumours online said the government is planning to offer support to developers with healthy balance sheets
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Shares of mainland Chinese property developers surged on Wednesday as rumours emerged that the authorities are planning a raft of supportive measures for financially stable home builders.
The Shanghai Stock Exchange Property Index jumped 3.5 per cent, while developers and suppliers rallied in Shenzhen.
The rumours circulating online said the Chinese government is planning to offer support to developers that have weathered the debt crisis rocking the industry and emerged with healthy balance sheets.
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Meanwhile, Bloomberg News reported that the authorities are drawing up a shortlist of financially sound developers to receive the benefits. They will have to fulfil requirements such as showing auditing reviews to prove their financial statements are reliable and that they have no major defaults on record.
The eligible developers on the list may benefit from several preferential measures covering equity financing and loans, as well as real estate investment trusts and acquisitions, Bloomberg reported.
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The rumour comes a couple of weeks after Yi Huiman, chairman of the China Securities Regulatory Commission, pledged to stabilise the real estate market and support “good-quality developers” by improving their balance sheets.
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