China Evergrande Group’s Evergrande Center is seen among other buildings in Shanghai, China, September 24, 2021. REUTERS/Aly Song
BEIJING/HONG KONG, July 25 (Reuters) – China will launch a real estate fund to help property developers resolve a crippling debt crisis, aiming for a warchest of up to 300 billion yuan ($44 billion) in an effort to restore confidence in the industry, according to a state bank official with direct knowledge of the matter.
This move will mark the first major step by the state to save the assessed property sector since the debt problems became public last year.
The size of the fund will initially be set at 80 billion yuan through support from the central bank, the People’s Bank of China (PBOC), the person, who declined to be identified due to the sensitivity of the matter, she told Reuters.
PROPERTY SHARES RALLY
Turmoil in China’s property market, from the debt crisis, to the credit crunch and the mortgage boycott, has shaken confidence in the sector and seen authorities scrambling to avoid problems that spill over into the wider economy. On the same subject : Netflix’s Top Movies and Shows: What’s Hot on July 12, 2022.
“If the (fund) can be realized in the near future, it will help prevent more developers from failing and also help improve market sentiment as well as developer sales,” said Raymond Cheng, head of -China research at CGS-CIMB Securities.
The latest news pushed the Hang Seng Mainland Property Index (.HSMPI) up more than 5% early Monday, and was up 3.5% in mid-afternoon trade. The CSI 300 Real Estate Index (.CSI000952) rose almost 2.0%.
Financial information provider REDD first reported the details of the real estate fund on Monday.
The fund will support more than a dozen property developers, including China Evergrande ( 3333.HK ) group, REDD reported, citing unidentified sources.
Regulators and local governments select developers eligible for support from the fund, REDD said, adding that the fund can be used to purchase financial products issued by developers or finance the acquisitions of property buyers. status of their projects.
Beijing is also considering a national policy for issuing special bonds for shantytown redevelopment, the report said.
($1 = 6.7553 renminbi Chinese yuan)
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Reporting by Beijing Newsroom and Clare Jim in Hong Kong; Additional reporting by Kevin Huang in Beijing; Editing by Anne Marie Roantree and Shri Navaratnam This may interest you : What is Real Estate Equipment?.
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