China’s additional stimulus to homebuilders unlikely to drive a strong recovery – Fitch Ratings
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Commenting on China’s latest support measures to stabilize the country’s property markets, Fitch Ratings said that these policy reforms are unlikely to drive a strong recovery in the sector.
“We believe this is a sign of the government providing greater support to private developers that are not in distress to avoid further defaults in the sector that could increase the number of stalled residential projects.”
“More private developers that are not in distress may benefit from similar funding support in the near term, supporting their liquidity.”
“However, the programme’s capacity to improve their debt maturity coverages significantly will depend on its scale.”
“Such policies may provide liquidity relief for some developers, but we still expect the recovery in housing sales to be the key to a sustainable improvement in developers’ liquidity more broadly.”
At the time of writing, USD/CNY is cutting losses to trade near 6.8510 while the AUD/USD pair clings to sizeable gains around 0.6970.
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