Stocks are mixed as China scrambles to avoid major real estate developer bankruptcy
by ZIMO ZHONG
Associated Press
HONG KONG (AP) — China stocks were mixed Wednesday as the country scrambled to avoid major real estate developer bankruptcy.
Hong Kong stocks added 0.2% to 17,129.37, extending their gains for a fourth consecutive day. Hang Seng Tech Index advanced 0.7%, with JD.com gaining 0.6% after the company announced a share buyback of as much as 3 billion dollars over the next three years.
The Shanghai Composite Index dropped 0.5% to 3,040.04, and the smaller market in Shenzhen also shed 0.5%.
China’s local media reported Tuesday that the country’s state-owned banks may raise up to 80 billion yuan ($11.2 billion) in syndicated loans to assist the property developer China Vanke in meeting its impending repayment deadlines.
Vanke was the second-largest developer in the nation based on market value, and has followed the path of Evergrande and Country Garden, both of which have already defaulted on their debts. In January, a Hong Kong court ordered Evergrande to undergo liquidation following a failed effort to restructure $300 billion owed to banks and bondholders.
The ratings agency Moody downgraded Vanke’s credit rating to “junk” status on Monday.
Vanke stocks surged after the news of the potential financial support while experiencing a 2.2% pullback Wednesday. On Tuesday, its shares listed in Hong Kong closed 10.3% higher, and the stock traded in Shenzhen ended the day with a 5.7% increase.
In metal trading, China central bank continued to exhibit robust gold-buying activities amid global geopolitical tensions and haven demand, which further drove up the price of gold. Official data showed that China’s gold reserves increased for a 16th consecutive month, with gold reserves reaching 72.58 million ounces by the end of February, representing a month-on-month increase of 390,000 ounces.
Gold retreated Wednesday after reaching a fresh record high Monday, when investors flocked to buy stocks of gold producers and jewelers, further boosting the stock prices.
Chow Tai Fook Jewellery Group saw a 0.9% increase Wednesday following last week’s 4.6% surge that pushed the stock to all-time highs. Zijin Mining Group, China’s biggest gold producer by market value, rose 0.4% in Shanghai and 0.6% in Hong Kong.
Elsewhere, Chinese smartphone maker Xiaomi was up 0.4% after it announced Tuesday that it will deliver its first electric vehicle on March 28.
