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China’s securities regulator CSRC said that it will allow property developers to sell shares to raise funds, reversing its ban on equity refinancing imposed in 2009 to prevent the market from overheating. The CSRC rolled out five measures to facilitate equity financing:
It said that the policy “aims to revitalise the existing resources, avoid risks and stabilise the real estate market”. Investment bank CICC said that the move will ease the industry’s liquidity problems and “will boost market sentiment in the short term and promote stability of the market in the long run”. The move led to a strong rally in property developers bonds, led by dollar bonds of Future Land, Gemdale, GLP, Seazen, Studio City Shui On and Longfor (see top gainers below).
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