[ET Net News Agency, 28 April 2020] Moody's Investors Service said in a new report that
Chinese property sales improved in March, narrowing the decline in national contracted
sales to 22.8% in the first quarter of 2020 from 34.7% in the first two months of 2020
when the coronavirus outbreak was at its peak. However, the national sales value in March
still declined by 12.1% when compared to last year.
Moody's outlook for China's property industry turned negative in April given
deteriorating operating conditions, and it forecasts national sales to decline by 5%-10%
in 2020.
"However, we expect rated developers to continue to outperform the general market
because of strong sales execution and branding, allowing them to increase their market
share as weaker developers are forced out of the market," said Danny Chan, a Moody's
Assistant Vice President and Analyst. "As a result, industry consolidation will continue
in the next 12-18 months."
Meanwhile, offshore bond issuance by rated developers dropped significantly in April
amid high market volatility. Onshore bond issuance also declined in April, but overall
funding conditions remain broadly stable given strong levels of liquidity.
The Asian Liquidity Stress sub-indicator (ALSI) for rated high-yield Chinese developers
stayed flat at 21.7% in March. The ALSI measures the percentage of high-yield companies
with weak liquidity, with the indicator increasing when liquidity deteriorates. (KL)