Chinese Real Estate Stocks Drop Due to Concerns Over “Evergrande”

Chinese Real Estate Stocks Drop Due to Concerns Over “Evergrande”

Chinese real estate stocks slid on September 25 as investor sentiment was negatively impacted by the last-minute cancellation of meetings between the troubled China Evergrande Group and its major creditors, along with the company’s announcement that it needs to reassess its restructuring plan, Invest-Gate reports.

The Bloomberg Intelligence index for construction stocks dropped by approximately 6%, marking the largest decrease since late December. Evergrande’s stumble was one of the major factors affecting the index, along with China Aoyuan Group, whose shares plummeted by 72% upon resumption of trading.

Furthermore, these recent developments have exacerbated growing concerns about the Chinese real estate sector, as investors question the extent of the recent stimulus measures’ impact on the market, given the limited alleviation of the liquidity crisis developers face.

The upward trend of Chinese real estate stocks, driven by supportive sector policies since late August, has also reversed. Measures such as reducing initial homebuyer payments and lowering interest rates on existing mortgage loans contributed to this trend.

It is noteworthy that the real estate stock index has declined by approximately one-third this year, surpassing the losses experienced by the broader stock market.


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