Three Reasons Investors Fell Out of Love With China Vanke
Unless the broader property market stabilizes, it will be a struggle for even the best developers to survive.
Swept up in the property crunch.
Photographer: Tomohiro Ohsumi/Bloomberg
Shenzhen-based China Vanke Co., these days the country’s largest real estate developer by sales, is prudent and well regarded. It still commands an investment grade even as its peers tumble into distress, and has been an investors’ darling in uncertain times.
But that winning streak seems broken. Recently, Vanke’s bonds were brutally sold off. Its $600 million dollar note due next June dropped to as low as 75 cents on the dollar. The price action was so furious that the developer had to make a public statement, saying that its finances are stable and that it has enough cash to cover short-term borrowings.