[ET Net News Agency, 30 September 2019] Moody's Investors Service said in a new report
that most rated Chinese high-yield property developers can withstand a hypothetical
renminbi depreciation of about 10%, with only a slight weakening in key credit metrics.
"The developers' strong revenue and earnings over the next 12-18 months will provide a
buffer against the negative effect of a depreciation of the renminbi against the US
dollar, while the portion of debt denominated in renminbi also remains far larger than
foreign currency debt," said Danny Chan, a Moody's Assistant Vice President and Analyst.
Chan was speaking on the release of the latest edition of Moody's monthly China Property
Focus newsletter, which tracks key trends and issues in the market.
Meanwhile, year-on-year national sales growth improved to 11.1% in August (three-month
moving average) from 8.0% in July, driven mainly by an increase in sales volume.
"We expect property sales will continue to slow for the rest of 2H 2019 from a high base
in 2018, as financing conditions and regulatory measures will remain tight," added Chan.
Contracted sales growth for the 29 developers that Moody's tracks -- and out of the 67
that it rates -- slowed to 14.1% in August from 15% in July.
Issuance in both China's offshore and onshore bond markets remained low in September
amid tight regulatory controls.
Onshore bond issuance slowed to HK$694 million in September from HK$1.9 billion in
August. And while offshore bond issuance increased to HK$3.0 billion in September from
$2.1 billion in August, the amount remained low compared to the average for the first
seven months of 2019. (KL)