By Clare Jim
HONG KONG (Reuters) – Investors sold China Vanke stock and bonds on Monday, picking up from where they left off last week as concern over the developer’s liquidity trumped fundraising plans and assurance from a business partner.
The price of China Vanke’s Hong Kong-listed shares fell 7.1%, having finished last week down 8.1%.
The developer’s Shenzhen-listed shares lost 4.7%, exacerbating last week’s 3% decline.
China Vanke’s 2029 bonds were bid at 44.512 as of 0802 GMT, 1.4 cents lower than on Friday, showed data from Duration Finance.
Its 2027 dollar bonds covered around 3 cents from earlier in the session and were bid at a similar level on Friday.
The state-backed property developer’s onshore bond due 2028 was temporarily suspended from trading after plunging over 20% to 64 yuan in the afternoon, while a 2027 bond reversed gains to ease 3.6%.
Its other yuan bonds generally stabilised, however, with small gains of over 1%.
China has struggled to contain the debt crisis that has gripped the sector since mid-2021 and seen property giants including China Evergrande Group and Country Garden default on billions of dollars in debt.
Shenzhen-based Vanke, another well-known household name with many high quality projects across major cities, had been seen by the market as a financially sound developer, especially with backing from its largest shareholder, state-owned Shenzhen Metro.
Any repayment trouble by Vanke could further hamper market confidence, analysts said.
Market concern came after credit data provider Reorg on Monday said China’s second-biggest property developer by sales – after state-owned Poly Development – was in discussion with insurers to extend debt maturities, and that management had visited Beijing to seek government assistance.
Local media subsequently reported that New China Asset, a unit of New China Life Insurance, had rejected proposals to extend maturities of China Vanke debt it held.
On Sunday, New China Asset said it has been maintaining normal business cooperation with China Vanke, and that reports about the pair are “untrue”.
China Vanke on Monday declined to comment when contacted by Reuters.
On Friday, China Vanke said it planned to raise about 1.2 billion yuan ($166.70 million) by spinning off three warehouse logistic parks owned by a unit and listing them in Shenzhen through an infrastructure real estate investment trust.
Vanke also experienced similar sell-offs in early November, and Shenzhen Metro, together with its holding body, Shenzhen state asset regulator (SASAC), reacted quickly at the time to show their liquidity support for Vanke to ease market concerns.
($1 = 7.1985 Chinese yuan renminbi)
(Reporting by Clare Jim; Editing by Christopher Cushing and Emelia Sithole-Matarise)
