-
Policy
Policy
Exclusive interviews with leading policymakers that convey the true policy message that impacts markets.
LATEST FROM POLICY: -
EM Policy
EM Policy
Exclusive interviews with leading policymakers that convey the true policy message that impacts markets.
LATEST FROM EM POLICY: -
G10 Markets
G10 Markets
Real-time insight on key fixed income and fx markets.
Launch MNI PodcastsFixed IncomeFI Markets AnalysisCentral Bank PreviewsFI PiFixed Income Technical AnalysisUS$ Credit Supply PipelineGilt Week AheadGlobal IssuanceEurozoneUKUSDeep DiveGlobal Issuance CalendarsEZ/UK Bond Auction CalendarEZ/UK T-bill Auction CalendarUS Treasury Auction CalendarPolitical RiskMNI Political Risk AnalysisMNI Political Risk - US Daily BriefMNI Political Risk - The week AheadElection Previews -
Emerging Markets
Emerging Markets
Real-time insight of emerging markets in CEMEA, Asia and LatAm region
-
Commodities
-
Credit
Credit
Real time insight of credit markets
-
Data
-
Global Macro
Global Macro
Actionable insight on monetary policy, balance sheet and inflation with focus on global issuance. Analysis on key political risk impacting the global markets.
Global MacroDM Central Bank PreviewsDM Central Bank ReviewsEM Central Bank PreviewsEM Central Bank ReviewsBalance Sheet AnalysisData AnalysisEurozone DataUK DataUS DataAPAC DataInflation InsightEmployment InsightGlobal IssuanceEurozoneUKUSDeep DiveGlobal Issuance Calendars EZ/UK Bond Auction Calendar EZ/UK T-bill Auction Calendar US Treasury Auction Calendar Global Macro Weekly -
About Us
To read the full story
Sign up now for free trial access to this content.
Please enter your details below.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
Real-time Actionable Insight
Get the latest on Central Bank Policy and FX & FI Markets to help inform both your strategic and tactical decision-making.
Free AccessMNI China Daily Summary: Wednesday, December 11
MNI: Some China Developers Desperate As Debt Peak Looms
Chinese property developers are eager to move units with some even resorting to unusual sales tactics to partially accept grain and fruit as they face a debt repayment peak in the second half of the year, but any obvious rebound may not come until the end of the third quarter, according to analysts.
Developers will see over CNY310.2 billion of maturing bonds in H2, with July alone near a quarter of that amount at CNY83 billion of maturities, data by China Real Estate Information Corp showed. Debt defaults may continue to increase should developers fail to restore cash flows by sales or bond rollovers.
WEAK SALES
Since June, home sales started to recover in first- and second-tier cities following the gradual easing of pandemic restrictions. Commercial housing sold in 30 major cities soared by 81.1% m/m last month, with the year-on-year decline narrowing by 40.9 percentage points to -7.4% in June from May, according to data from Wind Information.
However, a wider recovery is still hindered by dampened consumer expectations as purchasing power shrinks, and the leverage ratio of the residential sector is already high. Optimistically, overall home sales may bottom out by end-Q3, as it requires 1-2 quarters for lower mortgage rates to flow through following the 15-bps cut in five-year Loan Prime Rate in May, wrote Li Shuang, researcher at Shanghai Ganglian in a research note. SEE: MNI: A Slow Road Ahead For China Property Rebound
UNUSUAL SALES
Currently, in smaller cities, unusual sales tactics range from accepting bulk grains as partial payment, to handing out home purchase vouchers to residents displaced by shantytown renewal programmes, underlining the dire state of developers there struggling to sell units in a large-scale way.
It is reported that in Minquan county in the central province of Henan, home buyers can use wheat to offset as much as CNY160,000 of their down payment as Central China Management, a local developer would offer an above-market price, CNY4 per kilogramme. Such financing was followed by accepting garlic, watermelons, or peaches as down payments, though some of them were already suspended by local governments to avoid misunderstanding.
REFINANCING DIFFICULTY
While the government has rolled out measures to support and restore confidence in the property sector, banks will continue to be selective about financing developers through loans, bonds, and asset management products, according to a report by Moody’s, pointing to continuous defaults into H2.
Constrained bond markets will also keep developers' refinancing risks elevated, the Moody's report said.
Developers' bond financing from domestic and offshore sources totalled CNY54.8 billion in June, falling 57.7% y/y or 2.5% m/m, wrote Jiang Yuhui, chief real estate analyst of Cinda Securities in a research note. Issuance overseas increased slightly from the previous month, though declining a bit domestically, said Jiang, adding that most issuers are still state-owned developers, with longer payment maturities and higher interest rates, Jiang added.
It will take time for home sales recovery to channel through improvements of credit and confidence in developers, and eventually turn into substantial rebound in land acquisition and property investment, wrote Ming Ming, chief economist of CITIC Securities in a research note.
But the upward momentum this time may be weaker than before, as the government still sticks to crack down on speculative home buying that would limit the room for higher prices, which is the key to boosting sales, Ming added.
To read the full story
Sign up now for free trial access to this content.
Please enter your details below.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.