Evergrande soars over 70% leading Chinese property stocks higher after Country Garden avoids default
NANJING, CHINA – AUGUST 18, 2023 – Aerial photo shows a residential area of Evergrande in Nanjing, East China’s Jiangsu province, Aug 18, 2023. (Photo by Costfoto/NurPhoto via Getty Images)
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Shares of Chinese property developer Evergrande jumped over 70% on Wednesday, leading gains on the Hang Seng Index.
The real estate sector was the top gainer on the HSI, but the overall index was still in negative territory, dragged by health-care and industrial stocks.
Other stocks like Country Garden Holdings and Logan Group also surged, gaining 23% and 26% respectively, while the Hang Seng Mainland Property Index was up about 4%.
The gains come after Country Garden reportedly managed to pay $22.5 million in bond coupon payments on Tuesday, narrowing avoiding default.
The bond payments were originally due in August, but Country Garden submitted the payments hours before a 30-day grace period expired.
China’s property sector has languished ever since Evergrande defaulted in 2021. Last week, the stock resumed trading and closed nearly 80% lower in its first session in 17 months. Evergrande shares had closed at 35 Hong Kong cents on Tuesday.
Other property stocks have also plunged in the past year amid contagion fears. Shares of Country Garden have fallen 53% so far this year while Logan dropped 18%.
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