China’s Property Giant Sees Steep Decline In Shares
China’s property giant Country Garden recently opened to a steep decline in stock prices, raising concerns about bankruptcy and how that could spell wider economic turbulence in the real estate market.
The private developer saw stock prices plunge by more than 16 per cent when it opened in Hong Kong on Monday (14 Aug) due to missed bond payments and suspending trading in 11 onshore bonds.
Country Garden is currently a privately owned real estate developer and was named in Forbes’ list of the 500 largest companies in the world. The owner, Yang Huiyan, was recently listed as one of the richest women in Asia.
Risk default by September
Long seen as financially solid, the firm was unable to make two bond payments last Monday, and after a 30-day grace period, the company risks defaulting in September if it still cannot pay.
In addition to that, the group also released a statement in early August that it expected a net loss for the first half of the year totalling 45 billion to 55 billion yuan (about RM28 billion to RM35 billion).
Country Garden also has a significant investment stake in Malaysia at Johor’s Forest City under Country Garden Group. Currently, the multi-billion ringgit development spans across 1,740 hectares in Johor, just north of Singapore.
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