fbpx

Type to search

Some China Bond Fund Losses Top 20% Amid Real Estate Crisis

Funds with large holdings of Chinese real estate companies have been hit hard by the crisis spurred by Evergrande and debt-laden developers

It works by causing dilation of the blood vessels in the brain, leading to the release of vaso-constrictor peptides. You've decided to Suva dapoxetine 60 mg benefits start your day by drinking coffee. Doxycycline is available in a dose of 20 mg twice a day taken as a pill.

To be eligible to be in this clinical trial you will need to complete a short questionnaire and be willing to participate in the study. This also includes oral and other forms of treatment with other types of Bluefields donde puedo comprar misoprostol en estados unidos fungi like zygomycetes. We are seeking a reliable female that has had no children in the last 5 to 10 years who is ready for some motherhood.

It’s also essential to be sure to check that the bank has a minimum deposit to ensure they are willing to work with you, but there are also many lenders who have no minimum deposit. I got tired of all the side effects and Pedra Azul had to give up. This is an excellent drug that was first used in 1950, when it was known as prednisolone acetate in order to avoid side effects.


China new home prices
China's property market was slightly better in recent weeks after a deep downturn last year as authorities began easing regulations, including allowing smaller down payments, lowering mortgage rates and cutting the deed tax. Photo: Reuters.

 

Several Chinese bond mutual funds have plunged significantly in recent weeks as the debt woes of Evergrande Group, Modern Land, and Kaisa Group Holdings batter Chinese real estate companies’ bonds.

One of them, managed by Minsheng Royal Fund Management, has declined as much as 22% over the past month.

Four bonds of Minsheng Royal have declined more than 5% in their net value over the past month, according to data from Eastmoney.com. Three of them have large holdings of real estate company bonds and one has a large weight of bonds of construction and steel manufacturing companies, according to the funds’ respective disclosure documents for the third quarter.

All four funds started a steep decline from October 29, following reports that Modern Land defaulted on a $250 million dollar bond that was due on October 25. The sharp decline has pushed the year-to-date performance of each fund to the bottom 5% of funds of the same category.

“Why is the decline so large? Are all positions in real estate bonds? It shouldn’t have fallen so sharply even if all positions were in real estate bonds,” an investor commented on a bulletin board for Mingsheng Royal Tianxin Pure Bond, which has declined by 21.58% over the past month.

“Even a pure bond fund would lose so badly!” a user commented to a post on Weibo, a Twitter-like social media platform.

 

‘Difficult To Sell’

Wang Yuan, an investment advisor from Huatai Securities, told Asia Financial the fund has most likely been hit by the plunge of real estate sector bonds. “At present, the real estate companies’ bonds are extremely difficult to sell,” she added.

A Q3 disclosure document of the fund shows that it held large portions of corporate bonds and medium-term notes – 56.4% and 33.5% respectively – which usually have higher interest rates but are riskier than government bonds. The fund has 7% of its money invested in financial bonds but has no position in government bonds.

As of the end of Q3, three of the fund’s top five holdings were real estate companies’ bonds, including a bond of Powerlong Real Estate Holdings with a weight of 7.7%, a medium-term note of Huayuan Property with a weight of 6.9%, and a bond of Times Group with a weight of 6.8%.

These bonds have all declined significantly since the China Evergrande crisis triggered market panic in mid-September.

Powerlong’s 20 Baolong 02 bond closed at 88 yuan ($13.8) and Times Group’s 20 Shidai 09 closed at 66 yuan ($10.3) on Wednesday.

Investors have been worried about wider contagion from the property sector, which has seen a string of missed offshore debt payments and sell-offs in shares and bonds as China Evergrande, the world’s most indebted developer, repeatedly lurches to the brink of default.

The defaults by Funtasia Holdings, Sinic Holdings and Modern Land of their dollar bonds last month as well as the more recently-reported debt strains of Yango Group and Kaisa Group have battered Chinese real estate companies’ bonds.

Several bonds of China Aoyuan Group and Yango Group have fallen below 30 yuan ($4.70), which is less than half of their par value of 100 yuan ($15.7).

 

 

The AF China Bond 50 Index, above, is though showing resilience amid the Evergrande crisis. It is nonetheless down 2.3% since July, when the giant developer’s troubles resurfaced.

After abrupt declines in Minsheng Royal Tianxin’s net value in the first two days of this month, the fund stopped accepting new subscriptions on November 3. The fund now has 288 million yuan ($45 million) under management.

Last week, shares and bonds surged on state media reports of regulatory easing but analysts cautioned that it’s unlikely policies to rein in sky-high house prices will be significantly changed.

 

• Iris Hong

 

ALSO SEE:

Asia High-Yield Funds Down 16% On China Evergrande Turmoil

WATCH:

Jim Pollard

Jim Pollard is an Australian journalist based in Thailand since 1999. He worked for News Ltd papers in Sydney, Perth, London and Melbourne before travelling through SE Asia in the late 90s. He was a senior editor at The Nation for 17+ years and has a family in Bangkok.

logo

AF China Bond