Name: SCMP
Telephone: +852-2680-8888

bodyType

customContents

entityId

entityUuid

articlePageQuery

filter

article

articleBaseAdvertisingInfoArticle

articleListArticle

articleSeoArticle

helpersCheckIsPostiesArticle

hooksArticleAcknowledgementGateOverlayArticle

hooksTrackPageViewArticle

hooksContentInterestArticle

articleLinkingDataContent

articleSchemaContent

liveArticle

advertZone

sentiment

contentLock

topics

types

sections

moreOnThisArticles

urlAlias

commentCount

sponsorType

authorLocations

authors

paywallTypes

corrections

displaySlideShow

multimediaEmbed

printHeadline

seriesContainer

socialHeadline

headline

flag

firstTopic

glossary

flattenTypeIds

publishedDate

additionalInfoBoxes

images

image

relatedLinks

relatedNewsletters

__typename

createdDate

sponsor

factSheets

series

disableOffPlatformContent

published

updatedDate

summary

subHeadline

body

keywords

copyrighted

customTimezone

liveContents

Peggy Sito

Shares of Longfor Properties yesterday fell 8.68 per cent following the mainland developer's unexpected HK$3.09 billion share placement announcement on Tuesday.
Analysts said the latest placement, together with recent bond issues by other developers, reflected the improved liquidity condition offshore for mainland developers.
However, slower-than-expected property sales this month could increase the risks for some developers not meeting this year's contracted sales targets, they said.
Longfor saw its stock price close at HK$11.78. The company said on Tuesday it would issue 260 million shares at HK$11.88 each, the low end of an indicated price range of HK$11.88 to HK$12.38.
It said it planned to use the proceeds for its mainland property developments.
"The share placement was generally unexpected by the market," said Alan Jin, a property analyst at Japanese brokerage house Mizuho Securities.
Longfor had been aggressive in buying land sites in the past few months and that might be a reason for the fund raising, Jin said.
But taking into account investor response, he did not expect many developers to follow suit.
Other fund raising options were available, he said.
Among the shares of other mainland developers yesterday, China Overseas Land & Investment rose 0.72 per cent to HK$19.70 while China Resources Land fell 2.24 per cent to HK$16.62.
Ratings agency Standard & Poor's credit analyst Fu Bei said the share placement reflected improved credit conditions offshore.
Apart from the share placement, the offshore bond market has reopened. Some developers have tapped the market for funds in the past two months. These included Road King Infrastructure and Kaisa Group Holdings, Fu said.
"We note that credit conditions are generally improving in China since early this year. The central bank has reduced interest rates by 0.5 per cent and bank deposit reserves thrice since November 2011," she said.
In the onshore market, access to mortgage lending has become easier across regions, particularly for first-time homebuyers.
Property developers' access to, and cost of, project loans has also improved following the monetary easing, according to the S&P report released yesterday.
Credit Suisse said in a report this week that most developers' contracted sales for this month and next were expected to be only slightly better than last month, and significantly weaker than May or June - lower than previous market expectations.


China’s property developers from Vanke to Longfor see October sales surge

Evergrande shares to remain suspended as liquidators see no path to restructuring

China property: Beijing’s stimulus plan needs more time, money and policy support to resolve long-standing housing crisis

Chinese developers Poly, Longfor, CIFI report mixed results as forlorn property market awaits buyer-confidence rebound

Longfor Group

Surprise HK$3.09b cash call spurs investors to dump Longfor Properties

Business

China Business

Mainland developer's HK$3.09b placement points to improved credit conditions offshore


Stocks