Reuters, Hong Kong, November 11-The latest research report of investment bank UBS pointed out that China may have more real estate support measures introduced, and the bank believes that funding channels and sales revenue are the key.
Previously, domestic media reported that some real estate companies planned to issue bonds in the inter-bank market in the near future, and M&A financing may not be included in the “three red lines.” UBS believes that this will open up new financing channels for real estate companies. Together with allowing state-owned real estate companies to purchase assets of the same industry, it will benefit the overall liquidity of real estate companies, especially those developers with tight funds.
The bank’s analyst John Lam said in the report, “This also shows that the government is responding to the increase in the number of defaults by developers. We believe that more supportive measures may be introduced in the short term.”
Based on communications with real estate developers, UBS believes that funding channels and sales revenue will be the key. In addition to the help provided by inter-bank bond issuance, relaxing the use of pre-sale funds will also help real estate companies to pay off-shore/onshore debt. Once bond investors see that real estate companies have new sources of funding, the offshore and onshore bond markets may recover, allowing real estate companies to refinance their debt.
The bank also pointed out that as the policy environment improves, Sunac China1918.HKAnd new town development1030.HKThe stock price may rise further.China Resources Land1109.HKHelong Lake0960.HKIt is the industry’s first choice, because the company has a strong balance sheet and shopping mall business. (over)
Reporter Lei Meizhen; Reviewer Qu Guijuan
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