Chinese property developer sees surge in stock prices

Share prices of Chinese property developer China Vanke Co surged by 5.71 percent and 10.33 percent respectively on the Shenzhen and Hong Kong stock bourses at closing on Tuesday, which experts said indicated positive market sentiment over the developer's liquidity prospects. 

They also said China is expected to roll out more supportive policies improving the financing of developers and boosting the healthy development of the real estate market, as the 2024 government work report vowed to refine real estate policies and meet justified financing demands of real estate enterprises under various forms of ownership on an equal basis, so as to promote the steady and healthy development of the real estate market.

The surge in China Vanke Co's shares' prices came after its credit rating was downgraded further from Baa3 to Ba1, a junk territory, and was warned of potential further cuts by Moody's Ratings on Monday.

The agency said it made such a move with worries that China's unstable operating and financing environment for real estate will continue to weigh on Vanke's contracted sales, financing channels and liquidity.

Wang Xingping, senior analyst of Corporates at Fitch Bohua, said Fitch Bohua believes that China will continue to defuse property sector risk in a steady and orderly manner and promote the implementation of financing support policies for both property developers and projects, while on the demand side, China will continue to adopt city-specific policies to support local market.

"We expect policies for tier-1 and other core cities are still to be further relaxed," Wang said, adding she expects property investment decline will also narrow in 2024.

liuzhihua@chinadaily.com.cn