Mainland property bubble hits US$52t

Business | Eurus Yiu 21 Jul 2020

The total value of Chinese homes and developers' inventory hit US$52 trillion (HK$405.6 trillion) in 2019, the Wall Street Journal reports, citing data from Goldman Sachs, while 19 banks in China have sold 339.6 billion yuan (HK$376.7 billion) perpetual bonds - high-yielding subordinated bonds with no maturity dates - as of July 10 this year, according to data compiled by Bloomberg.

China's cash-strapped small lenders are expanding their pile of the riskiest kind of bank debt to shore up their capital levels, bracing against an economic slowdown and rising loan defaults.

Smaller lenders including Chongqing Three Gorges Bank, Bank of Rizhao, and Huarong Xiangjiang Bank accounted for more than 70 percent of the issuance.

Meanwhile, China Mobile (0941) saw mobile customer numbers drop by 240,000 in June, the second decline since February while China Unicom (0762) said it recorded a net increase of 783,000 users last month, reaching 309 million users in total. And China Telecomm (0728) said the number of 5G customers rose by 7.79 million to 37.84 million, equivalent to 11.01 percent of overall mobile customers.

Separately, state-owned carmaker Beijing China Auto Rental (0699) fell 4.87 percent to HK$2.93 as of midday yesterday before a trading halt after China's biggest carmaker SAIC Motor said it has terminated a deal to acquire 613 million shares in CAR Beijing for HK$3.1 per share.

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