Idiosyncratic events, negative rating actions on Chinese property companies and increasing liquidity concerns have weakened investor sentiment in the offshore bond market. Given it is a highly sensitive issue to people’s livehood and social welfare, the government has decided to intensify regulation across the board and pursue drastic measures aimed at reining in speculation and soaring housing prices. When viewed over a longer time frame, we view these developments as real market entry opportunities in the coming 12 months as we expect a more stable and healthier property sector in China in the long run. In this note, we will try to select developers with decent scale and financials.
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