April 15, 2011 / 11:59 AM / 9 years ago

China upholds fundraising ban on property developers

BEIJING, April 15 (Reuters) - Chinese property developers are still barred from raising funds on the domestic stock market, the securities watchdog said on Friday, maintaining a policy designed to help cool China’s red-hot housing market.

To calm the property market, China has virtually suspended all fundraising plans by developers for over a year, whilst ordering banks to cut lending to real estate firms.

“All refinancing applications from listed developers have to be approved by the Ministry of Land and Resources,” said Zheng Li, a senior official at the China Securities Regulation Commission.

The official Xinhua news agency also cited Zheng as reiterating that “the door to a fundraising by listed developers is still not open”.

The clampdown on fundraising has pushed Chinese developers listed outside China to seek new money by selling debt offshore, including Shimao Property Holdings (0813.HK) and Evergrande Real Estate (3333.HK).

Amid fears that soaring property prices could destabilise the world’s second-largest economy, Beijing has introduced a raft of measures designed to curb the housing market include restricting multiple home purchases and raising down payments.

Reporting by Langi Chiang and Koh Gui Qing; Editing by John Stonestreet

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