By Yongchang Chin
Shares of Hong Kong-listed Chinese property developers rallied Tuesday morning after China Evergrande Group said work had resumed at more than 90% of its stalled residential projects.
Evergrande's Sunday announcement likely reassured investors, with the stock rising as much as 10% on Tuesday, though it has since pared gains and was last 7.4% higher at HK$1.59. Hong Kong markets were closed Monday for the Boxing Day holiday.
Evergrande also said it planned to deliver 39,000 homes to buyers across China in December. The company added that its risk-management committee was helping to steer its massive restructuring and that it would engage with creditors. The world's three largest credit-rating companies have all deemed Evergrande to be in default.
The development pulled shares of other Chinese developers higher. Shimao Group Holdings Ltd. gained 3.1%, Sunac China Holdings Ltd. rose 4.6% and Guangzhou R&F Properties Co. advanced 2.2%.
The Hang Seng Mainland Property Index rose as much as 2.3%, but has since pared gains and was last 0.6% higher at 4221.58. The index is still down 30% year to date.
Related property management companies were also supported by positive sentiment, as Evergrande Property Services Group Ltd., Sunac Services Holdings Ltd. and Shimao Services Holdings Ltd. added 2.7%, 3.3% and 3.7%, respectively.
The property sector has also been buffeted by a barrage of defaults by some smaller developers, including Fantasia Holdings Group Co., Modern Land (China) Co. and Sinic Holdings Group Co.
Nomura estimated that the Chinese property sector's maturing offshore debt would nearly double to $19.8 billion in the first quarter of 2022 from $10.2 billion in the current quarter. That figure is expected to then climb to $18.5 billion in the second quarter, Nomura forecast.
Write to Yongchang Chin at firstname.lastname@example.org
(END) Dow Jones Newswires