HONG KONG, Dec 10 (Reuters) - Shares of China Vanke surged in afternoon trading on Wednesday as the embattled developer held a crucial bondholder meeting to vote on postponing repayment of a 2 billion yuan ($283 million) bond, while unverified rumours of government mortgage subsidies also boosted the battered property sector.
** Shares of China Vanke 000002.SZ rose by the daily limit of 10%, while its Hong Kong-listed shares 2202.HK surged as much as 18.5%.
** The CSI 300 Real Estate Index .CSI000952 surged as much as 7%, rebounding from an all-time low touched earlier in the day.
** Vanke's bonds also broadly rose, with one yuan bond due in May 2028 CN149478=SZ up 30% to 30 per 100 par value.
** The state-backed developer is facing a crucial test this week as creditors vote on its proposal to postpone repayment of a 2 billion yuan onshore bond due next week, marking its first such request.
** A bondholder meeting started on Wednesday morning, with the vote expected to conclude by midnight on Friday. The plan, which includes a one-year extension of principal and interest, needs approval from 90% of holders.
** Unverified market rumours of a 400 billion yuan government mortgage subsidy package with 1% interest subsidies, and potentially 2% subsidies for high-risk areas and struggling developers, also fueled the surge.
** Reuters could not confirm the market talk. The beaten-down sector is prone to large speculative moves whenever whispers of government support surface.
($1 = 7.0622 Chinese yuan renminbi)
(Reporting by Shanghai and Hong Kong Newsroom; Editing by Mrigank Dhaniwala)
((jiaxing.li@thomsonreuters.com))
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