China’s Developers Priced for Meltdown as Contagion Risk Spreads
- Property stocks plunge after Fantasia misses bond payment
- Nation’s dollar junk bonds set for biggest drop since 2013
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A missed bond payment by a Chinese developer reignited investor angst about the health of the nation’s property sector on Tuesday.
Chinese junk dollar bonds were poised for their biggest selloff in at least eight years amid renewed concern that authorities will do little to alleviate the credit crisis gripping the industry. Yields are near a decade high. Developer shares tumbled, with Sunac China Holdings Ltd. and China Aoyuan Group Ltd. falling at least 10%. A gauge of Chinese stocks in Hong Kong closed at a five-year low. China Evergrande Group’s silence on a reported stake sale in a unit left its shares suspended.