19 August 2019

Bond investors skittish over Chinese developers, WSJ says

Prices and trading volumes are falling in the US$47 billion bond market over growing worries about the health of Chinese property developers, the Wall Street Journal reported Thursday. Some of the most poorly rated bonds are not trading at all and some have fallen up to 7 percent this month, analysts were quoted as saying. Yields on a five-year dollar bond issued by Evergrande Real Estate Group Ltd., a debt-laden Guangzhou-based home builder, have risen to 11 percent from 8 percent at the end of last year. Until recently, property developers have been flooding the market with record dollar-denominated bonds sold in Hong Kong and Singapore, with international money managers snapping up the high yields on offer. This year, US$15 billion worth of bonds were issued by Chinese developers, mostly in January, accounting for 40 of global real-estate bond sales, the report said, citing data provider Dealogic.

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