BUZZ-China Vanke drops after Fitch downgrade

Reuters05-24

** Hong Kong shares of China Vanke fall 8.7% to HK$6.23, on course for the biggest one-day pct drop since April 2

** Its Shenzhen-listed stock falls 6.1% to 8.98 yuna, lowest since May 21

** Fitch Ratings downgrades China Vanke's long-term foreign- and local-currency issuer default ratings to 'BB-' from 'BB+' and the outlook is negative

** Downgrade reflects a reduction in co's liquidity buffer following weaker-than-expected sales performance in the year-to-date - Fitch

** The negative outlook reflects risks of the company's and industry's sales failing to stabilise despite intensifying government policy support and affecting the company's cash generation and asset recycling plans - Fitch

** Hang Seng Mainland Properties Index down 4.5%, Hang Seng Composite Index on properties and construction stocks

drops 3.1% and Hang Seng Index eases 1.3%

** Hong Kong and Shenzhen shares both down 13.3% YTD

(Reporting by Donny Kwok)

((donny.kwok@thomsonreuters.com))

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