China

China will halt the lending of certain shares for short selling from Monday, the securities regulator announced Sunday, in a move to support the country’s slumping stock markets, Bloomberg News reported. Strategic investors won’t be allowed to lend out shares during agreed lock-up periods, the Shanghai Stock Exchange and Shenzhen Stock Exchange said in separate releases following the China Securities Regulatory Commission’s statement.

A key offshore bondholder group of China Evergrande (3333.HK), opens new tab plans to join a petition to liquidate the developer at a hearing in a Hong Kong court on Monday, Reuters reported this week. The bondholder group owns more than $2 billion in offshore notes guaranteed by Evergrande and its support to a winding-up petition against the world's most indebted developer increases the chances of an immediate liquidation order from the court, lawyers in the industry said.

China Evergrande said on Thursday one of its units had entered a deal to sell its entire stake in Shantou Hengmeng Property Development for 137.6 million yuan ($19.20 million), Reuters reported. Hengda Real Estate Group Yuedong, a unit of the property giant, holds a 65% stake in Shantou Hengmeng, with the rest being held by Redleaf Trading, its Australia-based joint venture partner. Evergrande expects to gain about 304 million yuan from the sale, which will be used to pay off its debt worth 376 million yuan, owed to Shantou Hengyao Property Development.

Chinese leaders have signaled deepening concerns about the economy by unleashing a burst of measures aimed at reviving growth and steadying markets, the Wall Street Journal reported. The response—triggered most recently by a stock-market selloff—shows new urgency and marks a shift from only a week ago, when Chinese authorities sought to project confidence in the economy.

A key offshore bondholder group of China Evergrande plans to join a petition to liquidate the developer at a hearing in a Hong Kong court on Monday, Reuters reported. The bondholder group owns more than $2 billion in offshore notes guaranteed by Evergrande and its support to a winding-up petition against the world's most indebted developer could increase the chances of an immediate liquidation order from the court, lawyers in the industry said.

China’s real-estate crisis has dragged down the economy, caused massive layoffs and pushed multibillion-dollar companies to the point of collapse. Economists think it is about to get worse, according to a Wall Street Journal analysis. Sales of newly built homes in China fell 6% last year, returning to a level not seen since 2016, according to China’s statistics bureau. Secondhand home prices in its four wealthiest cities—Beijing, Shanghai, Guangzhou and Shenzhen—declined by between 11% and 14% in December from the year before, according to the broker Centaline Property.

China said it will cut the reserve requirement ratio for banks within two weeks and hinted at more support measures to come, an unusually early disclosure that shows mounting urgency across President Xi Jinping’s government to shore up the economy and halt a $6 trillion stock-market rout, Bloomberg News reported. The RRR — which determines the amount of cash banks have to keep in reserve — will be lowered by 0.5 percentage points on Feb.

China's plunging stock market is leading to losses on billions of dollars worth of derivatives linked to the country's equity indexes, forcing a vicious cycle of selling in stocks and futures contracts as market participants manage their risks, Reuters reported. Stock markets in Hong Kong, opens new tab and in mainland China plunged on Monday, extending a long spell of weakness driven by an exit of foreign investors alarmed by China's wobbly economy and a lack of stimulus measures.

Premier Li Qiang called for more effective measures to stabilize China’s slumping stock market after the mainland’s benchmark CSI 300 hit a five-year low on Monday, Bloomberg News reported. Chinese stocks have sold off for most of the past year. The factors behind the drop range from the protracted crisis in the housing market to persistent deflationary pressures in the wider economy. Beijing’s policy response, meanwhile, has failed to buttress sentiment among investors hoping for even easier monetary conditions or a big lift in fiscal stimulus.

The number of foreclosed homes in China rose 43% year-on-year in 2023, according to a private survey on Monday, highlighting a worrying trend of rising mortgage delinquencies amid a sustained property market slump and a patchy economic recovery, Reuters reported. The number of foreclosed homes up for auction stood at 389,000 units last year, said China Index Academy, a major independent real estate research firm. A total of 99,000 units worth a combined 150 billion yuan ($20.84 billion) were successfully sold at auctions, the firm said.