Hong Kong stocks sink in week on property developer default

Hong Kong stocks fell to a one-month low on heightened concerns about widening deby defaults among Chinese developers. A resurgence of the Delta variant in China has led to stricter lockdowns, clouding economic outlook. The Hang Seng Index tumbled 1.4 percent to 24,870.51 at the end of Friday trading, the lowest level since October 8. Debt concerns revived after Kaisa sought more time to come up with a solution after a meeting with the authorities.

This added to a string of defaulters after China’s “three red lines” deleveraging campaign shut many out of the loan market. While China Evergrande has struggled to restructure its US$305 billion liabilities, others including Fantasia Holdings and Modern Land have reneged on their offshore borrowings. Banking stocks also slipped on worries about their exposure to Chinese developers. ICBC and Construction Bank both retreated at least 1.3 per cent.

- China's property market contine to take a beating as Chinese developers faces lower housing prices and upcoming debt payments

- With Covid lockdowns and stricter regulations, China market conrtinues to be extemely rocky

- Fear of default for large property developers in China continue to throw the market into disarray