China developers' shares surge higher on easing news, Evergrande payment

[HONG KONG] Chinese developers booked their best 2-day gain in 6 years on hopes that Beijing may ease some property curbs and as embattled China Evergrande Group paid overdue interests on some dollar bonds.

A Bloomberg gauge of the nation's developer shares jumped as much as 5.5 per cent, extending a 2-day advance to 12 per cent, the most since July 2015. Developers including Gemdale and Jinke Properties Group Co were among the top performers on the CSI 300 Index Thursday (Nov 11). Short sellers unwinding bearish bets added fuel to the rally.

Confidence in the sector has been lifted as a spate of positive news this week that's raised expectations the government may be relaxing restrictions on developers' financing. Evergrande Group's bond interest payment, which looks set to help the firm avert a default again, also provide investors with some reprieve.

Dow Jones said China's central bank is considering easing rules to help developers sell assets to avoid defaults, after a similar report by local media Cailian. On Wednesday (Nov 10), the state-run Securities Times reported that rules for developers to issue domestic bonds may be loosened.

If the changes are well implemented, the risk of a hard landing for property market in China could be avoided, CGS-CIMB analysts including Raymond Cheng wrote in a note.

Other notable stocks to rise were Sunac China Holdings, which surged as much as 9.2 per cent in Hong Kong, and China Evergrande, which advanced 9.3 per cent. China Merchants Shekou Industrial Zone Holdings Co jumped by the 10 per cent daily limit on the mainland.

BLOOMBERG