Developer shares gain on PBOC easing pledge

[SHANGHAI] Chinese property stocks and bonds jumped for a second day after the central bank pledged to use more monetary policy tools to spur the economy and ease credit stress as signs of a real estate market slump worsen.

Country Garden Holdings, the country's largest developer, led the gains as shares jumped as much as 7.1 per cent in Hong Kong. The company's 6.5 per cent notes due in 2024 rose 5.6 US cents on the dollar to 84 US cents. Investors are betting the latest moves by policy makers will limit contagion from defaults by China Evergrande Group and other highly leveraged builders.

Chinese sovereign bonds meanwhile defied a global rout after the People's Bank of China cut rates on Monday for the first time in almost two years. High-yield dollar bonds were little changed, while onshore bonds traded higher.

China's central bank pledged to use more monetary policy tools to spur the economy and ease credit stress. The People's Bank of China will "open monetary policy tool box wider, maintain stable overall money supply and avoid a collapse in credit," Deputy Governor Liu Guoqiang said Tuesday at a briefing in Beijing.

The central bank will roll out more policies to stabilise economic growth, front-load actions and make preemptive moves, he said. It will address common concerns in the market in a timely manner and stay ahead of the market curve, he said.

BLOOMBERG