Evergrande, mainland developers boost Hong Kong stocks, with benchmark index closing higher for a third straight day
- The Hang Seng Index closed 1 per cent higher at 25,247.99, after losing as much as 0.5 per cent earlier
- Evergrande’s shares rose 6.8 per cent, after it made interest payments on three dollar bonds, lifts other mainland developers
Hong Kong stocks rose for a third straight day, boosted by mainland property developers after China Evergrande Group skirted bond default yet again.
The Hang Seng Index gained 1 per cent to 25,247.99 at the close on Thursday, after losing as much as 0.5 per cent earlier. The Hang Seng Tech Index rose 1.8 cent despite a decline in bellwether Tencent. China’s Shanghai Composite Index and the CSI300, which tracks the largest companies in Shanghai and Shenzhen, gained at least 1.2 per cent.
“Thanks to news of Evergrande repaying its overdue coupons, the Chinese property sector made a strong rebound,” said Will Shum, portfolio management director at iFast Financial in Hong Kong. “Ping An Insurance also benefits given its huge exposure on equity investments in the property sector.” Ping An Insurance gained 3.8 per cent.
Investors have been keeping tabs on China’s strained real estate industry ever since Evergrande’s liquidity crunch started roiling financial markets in the past few months, dampening confidence in the sector. Traders were relieved on Thursday as the developer averted default and signs of easing in China’s property sector emerged.
The Hang Seng Mainland Property Index jumped for a second day, adding 5.6 per cent on reports that Chinese policymakers could ease controls on property developers to sell bonds in the interbank market. China had introduced the “three red lines” policy in August last year to curb debts in the real estate sector.
Fantasia’s shares sink after developer defaults on bond payment
“While it [profit growth] was very slow, considering the challenges it faced in the third quarter amid the regulatory crackdown, the positive growth meant investors overreacted previously, so its stock rebounded,” said Shum.
Bond coupon payment deadlines for China Evergrande
| Date | Amount (US$m) | Type | Maturity date |
|---|---|---|---|
| Sep 23, 2021 | 17.9 | Onshore |
September 2025 |
| Sep 23, 2021 | 83.5 | Offshore | March 2022 |
| Sep 29, 2021 | 45.2 | Offshore | March 2024 |
| Oct 11, 2021 | 68.9 | Offshore | April 2022 |
| Oct 11, 2021 | 42.5 | Offshore | April 2023 |
| Oct 11, 2021 | 36.8 | Offshore | April 2024 |
| Oct 19, 2021 | 9.4 | Onshore | October 2025 |
| Oct 24, 2021 | 115 | Offshore | October 2022 |
| Oct 24, 2021 | 120 | Offshore | October 2023 |
| Oct 27, 2021 | 44.4 | Onshore | April 2026 |
| Nov 6, 2021 | 41.9 | Offshore | November 2022 |
| Nov 6, 2021 | 40.6 | Offshore | November 2023 |
| Nov 6, 2021 | 72.7 | Onshore | May 2023 |
| Nov 6, 2021 | 26.3 | Onshore | May 2024 |
| Nov 26, 2021 | 18.3 | Onshore | May 2023 |
| Dec 5, 2021 | 10.8 | Onshore | June 2023 |
| Dec 28, 2021 | 50.4 | Offshore | June 2023 |
| Dec 28, 2021 | 204.8 | Offshore | June 2025 |
| Jan 22, 2022 | 57.5 | Offshore | January 2023 |
| Jan 22, 2022 | 60 | Offshore | January 2024 |
| Jan 7, 2022 | 44.3 | Onshore | July 2022 |
| Jan 8, 2022 | 24.3 | Onshore | January 2023 |
Source: Evergrande, SCMP Research
Two stocks made their debut on the mainland exchanges. Zhejiang Oceanking Development, a chemicals manufacturer and distributor, gained 44 per cent to 8.63 yuan. Shandong Linuo Technical Glass, which produces and sells pharmaceutical glass packaging, surged 109 per cent to 27.12 yuan.
Other major gauges in Asia were mixed. Stocks in South Korea and Australia each retreated 0.2 and 0.6 per cent respectively, while the Japanese benchmark gained 0.6 per cent. US stock markets closed lower overnight on higher-than-expected inflation figures.
