By Sherry Qin


Chinese property stocks rose sharply Tuesday on hopes for more supportive policy measures, after a media report said Chinese authorities are drafting a list of developers that are eligible for obtaining funding.

The Hang Seng Mainland Properties Index jumped 5.4%. Sunac China surged 20% to 2.80 Hong Kong dollars (36 U.S. cents), Longfor Group Holdings gained 7.2% and China Vanke was up 5.3%.

A list of 50 state-owned and private developers will guide financial institutions in providing support via bank loans, debt and equity financing, Bloomberg said in a report on Monday, citing people familiar with the matter.

China Vanke, Seazen Group and Longfor Group are among the companies on the draft list, according to the Bloomberg report.

Chinese authorities, including the People's Bank of China, the National Administration of Financial Regulation and the China Securities Regulatory Commission, told financial institutions at a meeting on Friday to support property developers in providing loans, issuing bonds and ensuring reasonable equity financing from capital markets, according to a statement on the PBOC's website.

Financial institutions should "meet the reasonable financing needs of real estate companies of different ownership," according to the statement.

China's property sector continues to be a major drag on the economy with stalled projects and major developers defaulting. Despite a slew of supportive measures, home sales by value dropped 3.7% in the first 10 months of the year from the prior-year period, official data showed last Wednesday. Home sales fell 3.2% in the first nine months.

Country Garden Holdings failed to make a $15.4 million interest payment on an outstanding dollar bond in October. Meanwhile, Sunac China said Monday that it had satisfied all debt-restructuring conditions after defaulting on its offshore debt payment obligations in 2021.

However, the white list reportedly being compiled by authorities may still fall well short of being a savior for the Chinese property sector, said Vishnu Varathan, head of economics and strategy for the Asia & Oceania treasury department at Mizuho Bank, in a note.

Ongoing government support helps property companies with the completion of stalled projects, but also slows their ability to restructure and recover, he said.

Meanwhile, a similar white list last November initially triggered optimism but fizzled quickly as the property sector continued to languish, he said.


Write to Sherry Qin at sherry.qin@wsj.com


(END) Dow Jones Newswires

11-20-23 2250ET