Bloomberg - Concerns about the health of China s real estate sector spilled into Hong Kong markets on Monday, sparking the biggest selloff in property stocks for more than a year and dragging everything from banks to Ping An Insurance Group Co. and high-yield dollar bonds.
The Hang Seng Property Index plunged by as much as 5.9%, the most since May 2020, while Ping An Insurance plunged 7.3% in Hong Kong with Ping An Insurance, China s largest insurer by market value. The city s benchmark Hang Seng Index dropped 3.3%, its biggest one-day slump in two months. Junk-rated Chinese dollar bonds fell about as much as 2 cents, according to credit traders.
Investor angst that has centered on China Evergrande Group is rapidly spreading as senior Chinese policy makers silent on whether the government will step in to prevent a messy collapse in the world s most indebted developer. Evergrande, whose shares plunged 13% on Monday, faces interest payments deadlines on bank loans and bonds that few expect the property giant to be able to meet.
Investors may be concerned about highly geared names and nowadays don't care about valuations, said Philip Tse, head of Hong Kong China Property Research at Bocom International Holdings Co Ltd. There will be another downside unless the government gives a clear signal on Evergrande or eases up its clampdown on the real estate sector, Tse said.