By Clare Jim and Shuyan Wang
HONG KONG/BEIJING (Reuters) -Country Garden, China's largest private developer, is seeking to delay payment on a private onshore bond for the first time, a source said, after earlier on Monday suspending trading in 11 onshore bonds, sending its shares plunging to a record low.
Anxiety spread through markets following the worrying news from Country Garden, putting Beijing under mounting pressure to deliver support for the ailing real estate sector in order to shore up confidence in a stuttering economy.
Once considered a more financially sound developer, Country Garden shares dived 18.4% to HK$0.8 on Monday, dragging down the Hang Seng Mainland Properties Index which dropped 3.7%. The stock has lost 50% so far this month.
Country Garden's difficulties could have a chilling effect on homebuyers and financial institutions, with more private property companies close to a tipping point if financial support doesn’t materialise soon.
Two Chinese listed companies said over the weekend that they had not received payment on maturing investment products from Zhongrong International Trust Co, adding to the stress in a financial market already roiled by a property sector downturn.
A core pillar of China's economy, the real estate sector has suffered tumbling sales, tight liquidity and a series of developer defaults since late 2021, with China Evergrande Group, the world's most indebted developer, at the centre of the debt crisis.
Weak overseas demand, tepid domestic consumption and persistent problems in the property sector have been major factors in the economy's struggles to mount a solid post-COVID recovery, as shown by another set of weak data released last week.
Country Garden's offshore bonds also
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