Shares of property developers in China rose after a Chinese lender unveiled plan to issue debt to fund real estate acquisition. This comes when Chinese developers saw greater sell off of its bonds reaffirming contagion fears.
Shanghai Pudong Development Bank Co plans to raise 5 billion yuan ($790 million) by selling three-year bonds through China’s interbank market, it said in a filing on Monday. The funds would be used to finance real estate project acquisitions in the form of lending, it said.
Beijing is actively encouraging large property developers to acquire assets from small developer in liquidity crunch.
According to Reuters, China will facilitating channels for state-backed property developers to buy distressed assets of debt-laden private firms.
The CSI300 Real Estate Index jumped nearly 5%, on Tuesday morning, while the Hang Seng Mainland Properties Index gained more than 3%.
