Chinese Real Estate Stocks Hit By Developer Default Rumors

Shares in various Chinese property firms have fallen after media reports that Chinese developer Zhejiang Xingrun Real Estate cannot repay close to $400m of outstanding loans.

Shanghai-listed Poly Real Estate Group saw its shares slump by 3%, while shares in Shenzhen-listed China Vanke fell nearly 2%.

Zhenjiang Xingrun is based in Fenghua, a city in eastern China.

In March, Chaori Solar became the first Chinese firm to default on its bonds.

The default two weeks ago by Chaori, a solar components maker, led to fears that it could be the start of a wave of domestic bond defaults by Chinese firms.

Property developers in China have been a particular source of concern, as many have increased their debt loads in recent years to buy land and build.

At the time, prices for homes had been rising, but now the market appears to be cooling down.

via BBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza