China property sector woes deepen

Contagion risks: A worker walking in front of the Evergrande headquarters in Shenzhen. The possible collapse of one of China’s biggest borrowers has triggered worries about contagion risks to the property sector in the world’s second-largest economy. — AFP

HONG KONG: As investors were abuzz yesterday with cash-strapped China Evergrande Group’s possible sale of a stake in a unit to raise as much as US$5bil (RM21bil), more Chinese property developers grappled with ratings downgrades on worries about their ability to repay debt.

Evergrande is facing one of the country’s largest-ever defaults as it wrestles with more than US$300bil (RM1.25 trillion) of debt. The company last month missed making coupon payments on two dollar bond tranches.The possible collapse of one of China’s biggest borrowers has triggered worries about contagion risks to the property sector in the world’s second-largest economy, as its debt-laden peers are hit with rating downgrades on looming defaults.