Riding on the report that the China Real Estate Association was holding meetings in Hangzhou to address the property sector’s liquidity issues, Chinese developers’ stocks were staging a rally.
The best performer of the blue chips was Country Garden soared 13.7 percent yesterday while Longfor rose 3.7 percent.
The two-day conference was reportedly being held on July 26 and 27 with the China Real Estate Association saying that discussions would be on financing programs for embattled developers.
It was reported that there would also be a special session for enterprises interested in mergers and acquisitions as well as strategic cooperation.
The size of the fund was reported to be initially at RMB80 billion and will be used to buy unfinished projects and complete construction, before they are rented out to individuals as part of a government drive to boost rental housing.
Whilst, investment Bank Goldman Sachs was quoted as saying RMB300 billion real estate fund that China will reportedly set up could help mitigate the liquidity risk of the property sector in the short term and help developers resolve the crippling debt crisis.
State-owned China Construction Bank will contribute RMB50 billion into fund, but the money will come from PBOC’s relending facility.