Country Garden Holdings, one of China’s largest property developers, is set to release its earnings report for the first half of the year. This comes after the company missed interest payments on its bonds earlier this month, raising concerns about the state of China’s property market.
The sector has been greatly impacted by falling prices and plummeting sales, causing ripple effects on the broader economy. The recovery from the lifting of Covid-19 restrictions at the end of last year has been weaker than expected, adding to the challenges faced by the property market.
In preparation for the upcoming report, Country Garden has announced plans to issue approximately $35 million worth of new shares in order to generate additional cash. Additionally, the company has approached creditors to request a 40-day grace period for an onshore bond payment that is due on Saturday.
In a separate development, it has been reported that certain Chinese state-owned banks will soon lower interest rates on existing mortgages for the first time since 2008. This follows a recent move by Chinese officials to reduce the tax on stock purchases.
These measures are part of an effort to restore confidence among investors and consumers alike. With a target of 5% economic growth for this year, the government is facing the risk of falling short, particularly given the challenging conditions in the property market.
Despite this backdrop, the CSI 300 Index and Hong Kong’s Hang Seng Index closed relatively flat. However, Country Garden’s stock experienced a 3.3% decline in Hong Kong. Nonetheless, over the past five days, the stock has seen a 25% increase.
In conclusion, the upcoming earnings report from Country Garden will shed light on the current state of China’s property market amidst ongoing turbulence. As the sector faces various challenges, efforts to restore investor and consumer confidence are being implemented. The outcome of these measures will be crucial for China’s economic growth prospects moving forward.