(Bloomberg). — Shimao Group Holdings Ltd.’s dollar bonds pushed losses to new lows, despite assurances by a unit that normal business operations were taking place. The property developer’s shares fell as much as 5% to the lowest in more than a decade. 

Chinese growth slowed further in November as a worsening real-estate market slump and Covid disruptions weighed on the world’s second-largest economy. These data highlight the effects of property sector problems and show the magnitude of the challenges facing China’s government to stabilize the economy. 

China Evergrande Group’s units have been asked to halt asset disposals by a working team sent to the developer’s headquarters in Guangzhou as it assesses the true picture of Evergrande’s assets and liabilities, Caixin Magazine reported.  

These are the Key Developments

• China’s Hidden Debt is a Problem: QuickTake
• Hong Kong’s Property Tycoons Sacrifice Profit to Appease Beijing
• China Developers Fall as Shimao deal Stokes Governance Concern
• Shimao Deal Is ‘Red Flag’ Amid Liquidity Concern, JPMorgan (NYSE:) Says
• What’s Next for China Evergrande, Crushed by Debt: QuickTake
• Hard Landing in Property Market Would Crater China’s Economy

Shimao Dollar bonds fall to record lows; shares also sink (10:03 am. HK).

According to credit traders on Wednesday, Shimao dollar bond prices fell by 3 to $5 cents per dollar, pushing losses to new lows. The company’s 4.75% note due 2022 dropped 5.8 cents on the dollar to 58.2 cents, set for another record low after the bond tumbled 15.8 cents the previous day, according to Bloomberg-compiled prices as of 9:58 a.m. in Hong Kong. 

China’s Economy Slows in November as Property Slump Deepens (10:03 a.m. HK)

The increase in industrial output was 3.8% compared to a year ago. This is a significant improvement from the 3.5% recorded in October, and well above the 3.7% forecast by economists. Retail sales growth weakened to 3.9%, missing economists’ forecasts of a 4.7% gain. 

In the first 11 months of this year, fixed-asset investments saw a 5.2% decline in growth. The same time period saw property investment grow by 6.6%, a slowdown from 7.2% in January-October. This was due to tighter financing regulations and sluggish sentiment. 

Chinese Developer Sunac’s Dollar Bonds Continue to Fall (9:48 a.m. HK)

Sunac China Holdings Ltd.’s dollar notes extended their declines, with some sliding 2 cents on the dollar, according to credit traders. The firm’s 7.95% 2022 note fell 1.5 cents to 77.4 cents, Bloomberg-compiled data show. 

China Home Market Suffers Deepening as Prices Drop for the Third Month (9:00 a.m. Hk)

China’s home prices fell for a third consecutive month in November, adding to a property industry slump that’s hurting the economy.

According to the National Bureau of Statistics, new-home prices fell 0.3% in 70 cities last month, as opposed to October’s fall of 0.25 percent. The secondary market saw a 0.37% decline, which was down for the fourth month. 

Shimao Unit says business as usual, has the ability (OTC) to repay debt (9:14 a.m. HK).

A unit of Shimao said its business activities are normal and there’s no event that would affect its ability to repay its bond principal and interest.

The statement from Shanghai Shimao Co. on Tuesday evening came as the Shanghai stock exchange asked the firm to “prudently assess” the impact of related debt given recent attention on borrowings of the listed company and its controlling shareholder. Shanghai Shimao Co. was asked by the Shanghai Stock Exchange to justify the sale of its real estate management assets, Shimao Services Holdings Ltd. as well as explain any potential harm to smaller shareholders. 

China Boomtown banks cut mortgage rates amid property crisis (8:24 am. HK)

Following calls from the government to relax property restrictions amid the growing debt crisis facing developers, banks in Shenzhen cut their mortgage rates. Some lenders in the nation’s least affordable residential market lowered first-home mortgage rates to 4.95% from 5.1%, state broadcaster CCTV reported, citing local real-estate agents. The mortgage rates for second-homes in the city fell to 5.6% from 5.25%.

China’s top leaders this month signaled an easing of their clampdown on the real-estate industry to bolster home sales and support the economy as a residential market downturn and sporadic virus outbreaks weigh on the outlook.

Evergrande asked to stop asset disposal for more facts: Caixin (6:00 a.m. HK).

Caixin Magazine reported that Evergrande Group regional businesses were told by a Guangdong Province work team to cease handling asset dispositions. The report cited an unknown Evergrande person. 

The person said Guangdong government team gave notice to Evergrande units on Dec. 12, adding the decision should be intended for the government team to sort out the true picture of Evergrande’s assets and liabilities, according to Caixin. 

China Developers Face Hidden Debt: QuickTake (5:00 a.m. Hong Kong)

Turmoil in China’s junk bond market has been testing investors’ nerves — and that’s just concerning the debt they knew about. It turns out that property developers including Evergrande, Kaisa Group Holdings Ltd., Fantasia Holdings Group and Agile Group Holdings also have lots of opaque liabilities that may or may not be reflected on their balance sheets, making it hard to assess the companies’ true credit risks. 

A spate of defaults — most notably by Evergrande and Kaisa — have undermined confidence in China’s economy and led to mounting pressure on developers to reveal their hidden leverage. One has already committed to not issuing such debt.

©2021 Bloomberg L.P.