The surge in Chinese builders’ stocks and dollar bonds isn’t over as buying momentum driven by supportive government policy is likely to persist, some investors say.
The recovery has been driven by a flurry of measures aimed at stemming China’s property crisis, after efforts to crack down on debt-fueled speculation in the sector brought on a liquidity crunch. The fallout included a record amount of offshore-bond defaults and projects being suspended as builders ran low on cash.
“China property dollar bonds will continue to ride on the momentum for some time, and we don’t expect to see any major negative news for the sector in the near term,” said Wonnie Chu, managing director of fixed income at Gaoteng Global Asset Management Ltd. “Investors in the dollar-bond market have been chasing yields as well, which helped this rally.”
targeting developers’ liquidity and the sales slump. JPMorgan stock analysts wrote this week that more easing news “could drive short-term excitement in January” before a possible February pullback.of lower mortgage rates for first-time homebuyers under certain conditions, while the housing minister made a fresh pledge to help builders’ financing needs.
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