Original Title: Policies Support Real Estate Companies to Issue Bonds and Financing Reasonably to Help Accelerate Industry Integration
Our reporter Du Yumeng
On December 3, the “one bank and two meetings” responded to the risk disposal and impact of Evergrande Group, and expressed their views on the overall financing environment of the real estate industry.
“Financial regulatory agencies have voiced their voices on Evergrande Group’s risk events. First, it shows that the spillover impact of the event on the financial market is limited and controllable; the other is that the handling and resolution of Evergrande Group’s external debt should be market-oriented, legalized, and procedural. “The principle of socialization.” IPG China Chief Economist Bai Wenxi said in an interview with a reporter from the Securities Daily that the Evergrande Group incident is really a “case” in the market economy. There are certain disturbances in financing, but in the medium to long term, its impact is limited.
Support the reasonable financing of real estate enterprises
Judging from the latest statements of the regulatory authorities, reasonable real estate debt issuance and financing will continue to be supported.
The China Banking Regulatory Commission stated that under the premise of implementing the prudential management of real estate finance, it will guide banks and insurance institutions to provide financial services to the real estate and construction industries. At this stage, it is necessary to focus on meeting the mortgage needs of first homes and improved housing in accordance with local conditions, and rationally issue real estate development loans and M&A loans, increase support for affordable rental housing, and promote the steady and healthy development of the real estate industry and the market.
According to a set of data disclosed by the China Banking and Insurance Regulatory Commission half a month ago, as of the end of October, the real estate loans of banking financial institutions increased by 8.2% year-on-year, and the overall stability remained stable. More than 90% of personal housing loans are used to satisfy the first home purchase demand. At the same time, combined with the nearly half-month survey conducted by reporters from the Securities Daily, since September, under the warm policy winds, banks have accelerated their approval and lending of personal mortgage loans. For example, some banks complete the loan approval within 1 day after the lender’s information is complete; some banks can issue loans within 1 month after the buyer transfers the account.
The China Securities Regulatory Commission also stated that in the next step, it will continue to maintain the effective use of market financing functions, support the reasonable and normal financing of real estate enterprises, and promote the steady and healthy development of the capital market and the real estate market.
“On the whole, the financial regulatory authorities attributed the risk to Evergrande to its own mismanagement and blind expansion, and characterized it as a’case’ in the market economy.” Zhang Lichao, senior researcher at Guosen Securities, accepted the Securities Daily “The reporter said in an interview that it is expected that the subsequent credit and liquidity risks caused by this will be limited and controllable, and will not have a significant negative impact on the normal financing of future real estate enterprises and the entire real estate market.
On the evening of December 3, the central bank emphasized in response to the Evergrande issue that short-term risks for individual real estate companies will not affect the normal financing function of the medium- and long-term market. Recently, domestic real estate sales, land purchases, financing and other behaviors have gradually returned to normal. Some Chinese real estate companies have begun to repurchase overseas bonds, and some investors have also begun to buy US dollar bonds of Chinese real estate companies.
According to statistics from the Shell Research Institute, in the first 11 months of this year, domestic and overseas bond financing of real estate enterprises totaled approximately 846.6 billion yuan, a year-on-year decrease of 19%. However, based on single-month data, in November, real estate companies issued 48 domestic and overseas bond financings, an increase of 17 from October. The issuance scale was equivalent to about 47.3 billion yuan, an increase of 55.6% from the previous month. Among them, there were 46 domestic issuances with a scale of approximately 45.7 billion yuan, an increase of 125.1% from the previous month.
Pan Hao, a senior analyst at Shell Research Institute, said that in the near future, the implementation of real estate financial policies has been slightly relaxed, especially housing-related loans are being resolved, which will accelerate the return of corporate funds and superimpose the capital market’s support for reasonable and normal financing of real estate companies. It is expected that the real estate industry The market is expected to improve.
Industry consolidation will accelerate
When responding to Evergrande’s issue, the China Banking and Insurance Regulatory Commission specifically mentioned that “real estate development loans and M&A loans must be issued in a reasonable manner”.
Data from Flush iFinD shows that according to the date of the first announcement and excluding merger failures, this year, as of December 5, there have been 75 mergers and acquisitions in the real estate sector in the A-share market. Of these, 55 are in progress and 20 have been completed.
Zhang Lichao predicts that the trend of “big fish eating small fish” in the real estate industry will be further deepened, thereby further accelerating the industry’s clearing. Real estate companies with good operational management and debt control capabilities, solid endogenous growth, abundant cash flow, and high-level land reserves in cities, especially listed companies, are expected to become the main force of internal integration in the industry.
Li Chao, deputy director of the Urban and Real Estate Research Office of the Chinese Academy of Social Sciences Institute of Financial Strategy, said that real estate companies can be appropriately guided to explore new financing channels, forcing real estate companies to accelerate the transformation of financing structure, and achieve effective risk diversification through diversification of real estate financing channels. , To solve the current problem of over-reliance on credit funds. For this reason, it is necessary to further encourage the expansion of the proportion of direct financing of real estate enterprises and accelerate the advancement of asset securitization of real estate enterprises. In addition, it can also actively expand the diversified financing models of real estate trusts, bonds, funds and real estate trust investment funds, increase industry chain financing, gradually increase the asset liquidity of real estate companies, and effectively prevent and resolve the debt risks of real estate companies.