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The Shanghai Stock Exchange tried to facilitate the financing of quality Chinese developers by spearheading a call between five developers and investors on Friday, after state-backed Greenland Holdings' proposal for a delay in debt payments unnerved investors.
The developers, which included Longfor Group Holdings, Country Garden, Midea Real Estate Holding, CIFI Holdings and Seazen Group, presented their financial and business conditions during the call, a move aimed at enhancing investor confidence.
The exchange was trying to facilitate information disclosure and financing of quality home builders, said Duan Dongxing, deputy director of the bourse's bond operation department.
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"The exchange constantly pays attention to facilitating the reasonable financing needs of property companies. We also encourage and support private developers to actively disclose information ... which is also the foundation for constant financing of the issuers," he said during the meeting.
The meeting offered a chance for some of the top players in China's 18.2 trillion yuan (US$2.7 trillion) property market to voice their difficulties. Property developers continue to suffer because of Beijing's campaign to deleverage the sector, as well as a slump in sales amid an economic slowdown and recent Covid-19 lockdowns that have spread from large Chinese cities such as Shanghai and Shenzhen to smaller towns.
Greenland, in which the Shanghai government is a shareholder, on Friday sought an extension of payment for a US$488 million dollar bond due on June 25 with a coupon rate of 6.75 per cent, according to sources that declined to be named.
The Shanghai-based company cited the big impact Covid-19 restrictions had on its business operations, financial performance and short-term liquidity, according to an exchange filing on Friday. "Around 50 per cent of the group's sales offices across the PRC have suspended their businesses due to pandemic-related restrictions in their local areas. All of these have resulted in the amount of cash inflow staying below the group's expectations," it said.
The signal from Friday's meeting was "useful", said Raymond Cheng, managing director at CGS-CIMB Securities. "But weaker developers are the ones more in need of financing, and the key is to boost sales," he said.