China’s biggest commercial banks have pledged at least $162 billion in fresh credit to property developers, bolstering recent regulatory measures to ease a stifling cash crunch in the sector and triggering a rally in property shares.
Three state-owned banks lined up around $131 billion worth of credit lines to developers on Thursday, a day after three other lenders committed $31 billion, responding to Beijing’s call for support.
The authorities have been stepping up measures in recent weeks to support developers, after many defaulted on their debt obligations and were forced to halt construction.
Economic prospects are also worsening due to renewed COVID-19 lockdowns and other curbs in cities nationwide. China reported record high COVID infections on Thursday.
The massive, coordinated injection of liquidity into the property sector buoyed the shares of major developers on Thursday.
Country Garden (2007.HK), China’s top developer by sales, closed more than 20% higher after state media reported on Thursday it had received a credit line from Postal Savings Bank of China (PSBC) (1658.HK) worth at least 50 billion yuan ($7.00 billion).