Chinese developer stocks jump most in a month

[SHANGHAI] China's developer stocks rallied on Tuesday, with traders struggling to pin down a catalyst for the gains. The CSI 300 Real Estate Index of mainland-listed shares climbed 4.5 per cent, its best gain in a month.

Poly Developments & Holdings Group closed at its highest level since March. In Hong Kong, Sunac China Holdings jumped as much as 9.9 per cent after sinking by a record on Monday.

Developers on mainland and Hong Kong bourses have diverged in recent weeks, with typically stronger firms listed in Shanghai and Shenzhen outperforming. A move by authorities encouraging lenders to fund acquisitions of projects held by distressed developers may benefit larger, often state-owned firms most. A Bloomberg Intelligence gauge of Chinese property companies mostly traded in Hong Kong closed on Monday near a five-year low.

The local government in western China's Chengdu city took two parcels back without repaying the developers, saying that Evergrande failed to start construction on time, according to Dec 17 statements from a Chengdu land regulator.

One site, sized 83,997 square meters, was sold to a firm fully owned by by Evergrande's onshore subsidiary Hengda Real Estate in 2010, according to a statement and corporate registry search platform Qichacha.

Another site, sized 258,667 square meters, was sold to a developer in 2002 and transferred to another Hengda unit in 2011, according to a separate statement and Qichacha.

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Chinese real estate developer RiseSun Holdings is considering a potential sale of a unit that makes electric-vehicle batteries, according to people familiar with the situation.

The company is working with an adviser to identify prospective buyers and is seeking as much as US$1.6 billion for RiseSun Mengguli Power Technology, the people said, asking not to be identified as the information is private. RiseSun is also weighing other options, including selling a stake in RiseSun MGL to raise fresh funds, the people said. Negotiations are ongoing and there's no certainty the talks will result in a transaction, they added. A representative for RiseSun declined to comment.

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