Shares fall as default fears linger
Print Edition
SHANGHAI stocks dipped yesterday as property developers and banks fell on concerns the default of a Zhejiang-based real estate company may trigger a similar outbreak in the sector.
The Shanghai Composite Index shed 0.17 percent to 2,021.73 points.
The People’s Bank of China denied a media report it attended emergency talks on whether to bail out debt-ridden Zhejiang Xingrun Real Estate Co, the central bank said on its Weibo microblog.
The unlisted firm is reportedly unable to repay a 3.6 billion yuan (US$586 million) debt, including loans of 2.4 billion yuan from 19 commercial banks.
“Investors became risk averse as the defaulting real estate firm fueled concerns about an outbreak of credit default in the second quarter, a peak time for debt repayment,” Hongyuan Securities said in a note yesterday.
Early this month, Shanghai Chaori Solar Energy Science & Technology Co, a solar cell maker, failed to repay 89.8 million yuan in loan interest.
Poly Real Estate fell 1.6 percent to 6.77 yuan. Cinda Real Estate Co shed 2.3 percent to 3.41 yuan.
China Construction Bank, said to be the biggest creditor of Zhejiang Xingrun, shed 0.8 percent 3.78 yuan. China Minsheng Banking Corp dropped 2 percent to 7.23 yuan.
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