Hong Kong property stocks surge as China takes action to revive property sector

Real Estate

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Residential buildings stand at the Metro Town development, jointly developed by CK Asset Property Holdings Ltd., Nan Fung International Holding Ltd. and MTR Corp., in Hong Kong, China, on Thursday, Jan. 11, 2018.
Anthony Kwan | Bloomberg | Getty Images

Hong Kong-listed property stocks surged on Monday, leading gains on the Hang Seng Index and powering the benchmark to be the top gainer in Asia.

Shares of real estate companies like Evergrande, Logan Group and Longfor Group spiked over 9% on Monday, with Country Garden Holdings leading gains at 14.61% up. The Hang Seng Mainland Property Index was up 9.09%.

Over the weekend, Country Garden won approval from its creditors to extend payments for a 3.9 billion yuan ($540 million) onshore private bond, according to sources and a document seen by Reuters.

Bloomberg reported the company also wired a coupon payment on a 2.85 million Malaysian ringgit ($613,000) denominated bond.

Country Garden is still scheduled to pay $22 million in coupon payments on two U.S. dollar bonds it missed in early August. The grace period ends Wednesday.

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On Friday, China also took action to revive its property sector. The People’s Bank of China eased some borrowing rules and cut the reserve requirement ratio for foreign exchange deposits from the current 6% to 4% starting Sept. 15.

Some of China’s largest banks also cut interest rates on yuan deposits, including the Industrial and Commercial Bank of China, China Construction Bank Corp and Agricultural Bank of China.

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