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Chinese Developers’ Shares Decline Despite Government Support Measures

Despite the announcement of significant support measures by the Chinese government aimed at stabilizing the beleaguered property sector, shares of most major Chinese developers experienced a decline on Monday.


Market Reaction:

Hong Kong’s Hang Seng Mainland Properties Index registered a decline of more than 2%.


The index had previously seen a notable uptrend, having surged approximately 18% since the beginning of the month following statements from the Politburo on April 30, indicating intentions to coordinate efforts to reduce housing inventory.


Individual Developer Performance:

State-backed developer China Vanke observed a decline of over 1%.
Sunac China, another prominent developer that recently completed offshore debt restructuring, experienced a notable drop of 2.7%.
Shares of China-Ocean, another major player in the Chinese property market, slumped by more than 3%.

Government Support Measures:

China announced a series of measures on Friday aimed at providing additional funding amounting to 1 trillion yuan (approximately $138 billion) and easing mortgage rules.

Additionally, local governments were slated to purchase “some” apartments as part of the measures unveiled to stabilize the property sector.

Despite these efforts by the government to bolster the property market, investor sentiment remained subdued, leading to a decline in the shares of major Chinese developers. The market’s reaction suggests lingering concerns and uncertainties surrounding the effectiveness of the support measures in addressing the challenges faced by the property sector.