Media reports say that Evergrande was ordered by the local government of Danzhou in Hainan province to demolish 39 buildings in 10 days because the building permit was illegally obtained. The move gives indications that policy makers are not likely to significantly ease their crackdown on property developers, as per Bloomberg. Kenny Ng, strategist at Everbright Sun Hung Kai said, “Even though the Hainan project isn’t a significant one in its country-wide strategy, it will have a big impact on confidence”.
Separately, Evergrande reported a 99% YoY decline in contacted sales during the month of December. This was the steepest drop among 31 listed developers tracked by Citigroup analysts. The second largest contraction was a 72% decline for China Aoyuan, followed by a 68% drop in Shimao’s sales.
Evergrande’s dollar bonds continue to trade between 12-15 cents on the dollar.
For the full story, click here