© Reuters. FILE PHOTO: The China Evergrande Centre is seen in Hong Kong, China. August 25, 2021. REUTERS/Tyrone Siu
HONG KONG (Reuters) – Shares of Chinese property developers climbed on Monday after China’s central bank calmed markets by saying spillover effects from Evergrande’s debt woes were controllable and the country’s economy is “doing well”.
Top developers Country Garden and Sunac China jumped over 4% and 8%, respectively, in early trading but China Vanke declined 2.6%.
The People’s Bank of China Governor Yi Gang said on Sunday China’s economy faces challenges such as default risks for certain firms due to “mismanagement”, and that authorities are keeping a close eye “so they do not become systematic risks”.
On Friday, another PBOC official said the spillover effect of China Evergrande Group’s debt problems on the banking system were controllable and individual financial institutions’ risk exposures were not big.
Global financial markets have been rocked by contagion fear over a liquidity crisis at China Evergrande Group which has over $300 billion in liabilities.
The broader market eased 0.5%.
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