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Property News Weekly Digest
2021/9/25
〈Asian Post, Sep 26, 2021〉Developers say they have not been approached by mainland officials to fix housing problems and offer full support for policies to boost supply of flats

Hong Kong's biggest property developers have denied coming under pressure from mainland officials to solve the city's housing woes, following reports Beijing is losing patience with the industry.

The Real Estate Developers Association also stressed that its members, which include Sun Hung Kai Properties, Henderson Land Development and CK Asset Holdings, were continuing to support the Hong Kong government in boosting the housing supply and improving living standards.

Its executive committee, comprising more than a dozen top industry figures, released a statement yesterday following a regular meeting.

"The [committee] discussed a foreign media report about mainland officials expressing concern over Hong Kong's housing problems," the statement read. "The committee members clarify that they have never heard of such news, nor has the association."

It added the association had over the years worked with the government and across wider society to tackle issues relating to housing supply, the economy and people's livelihoods. Members would "definitely continue to dedicate their full support" to the government in these areas.

〈Asian Post, Sep 25, 2021〉Big banks and fund managers have been heading for the exit and reducing their exposure to China Evergrande Group in recent weeks as the outlook has soured for the world's most indebted property developer.

As a result, many financial firms sought to reassure investors and downplay their exposure as questions lingered about whether Evergrande managed to make an US$83.5 million coupon payment due on Thursday.

The Shenzhen-based firm had some US$300 billion in liabilities at the end of the first half of this year, and concerns about potential contagion have sent borrowing costs soaring for other property developers and shaken financial markets.

UBS Group chief executive Ralph Hamers said the bank's exposure to Evergrande was "immaterial" and limited to collateral calls on margin loans, while rival Credit Suisse said it was not "an existing lender to Evergrande and we have no direct lending exposure [to the firm]".

HSBCchief executive Noel Quinn told a banking conference this week that the situation surrounding Evergrande was "concerning", but the bank had not seen any direct effects from the situation and he was not worried about the lender's exposure.

〈Macau Daily, Sep 24, 2021〉FEARS that a Chinese real estate developer's possible default on multibillion--dollar debts might send shockwaves through global financial markets appeared to ease yesterday as creditors waited to see how much they might recover.

Shares of Evergrande Group, one of China's biggest private sector conglomerates, rose 18% in Hong Kong after the company said it would pay interest to bondholders in China.

The company gave no sign whether it would make a payment due yesterday on a separate bond abroad.

Evergrande's struggle has raised fears it might destabilize China's financial system and set off a global chain reaction. But economists said while Chinese banks and other creditors are likely to suffer losses, there appeared to be little way a default on its 2 trillion yuan($310 billion) in debt would hurt the Chinese system or feed through to financial markets abroad.

"It's definitely a local problem in China," said Robert Carnell, head of Asian research for ING.

〈Taipei Times, Sep 23, 2021〉Fears over the real-estate giant’s collapse caused markets to tumble and are contributing to a decline in the property sector

Fitch Ratings yesterday cut its growth forecast for China’s economy this year, citing a slowdown in the country’s colossal property sector, which is facing headwinds over faltering real-estate giant Evergrande Group .

China enjoyed a swift economic rebound from the COVID-19 pandemic, but strict new rules on the country’s developers have caused a deleveraging rush and helped push housing giant Evergrande to a crisis point.

Financial markets have tumbled over fears that the Chinese group could collapse, leading to possible contagion in the world’s second-largest economy and beyond.

〈The Standard, Sep 22, 2021〉Embattled developer China Evergrande Group's (3333) second-biggest shareholder Chinese Estates (0127) said yesterday it has sold HK$246.5 million worth of its Evergrande stake and plans to exit the holding completely, even though the shares rebounded by 17 percent yesterday.

The news came as Bloomberg reported that Evergrande's electric vehicle unit has stopped paying its staff and factory suppliers.

Chinese Estates sold 108.9 million Evergrande shares from August 30 to September 21, according to a statement to the Hong Kong exchange on Thursday. The Hong Kong real estate firm may sell its remaining 751.1 million Evergrande shares, adding it could take a loss of about HK$9.5 billion if it sold all the stock.

The moves by Chinese Estates add to sales by its chief executive Kimbee Chan Hoi-wan, the wife of billionaire Joseph Lau Luen-hung, who has been offloading shares in the world's most indebted developer as it edges closer to a restructuring. The exit by long-time supporters of Evergrande founder Hui Ka Yan is another sign that the company has lost the confidence of investors as it struggles to make good on its US$300 billion (HK$2.34 trillion) in liabilities.