Evergrande's trading resumption to boost real estate sector

China Evergrande Group's plan to resume trading on Aug 28 in Hong Kong, along with newly unveiled policy incentives to boost the real estate sector, is expected to shore up market sentiment and points toward a positive path for the property market, experts said.

Yan Yuejin, research director of Shanghai-based E-House China Research and Development Institution, said "The resumption of trading for China Evergrande sends a highly positive signal to the industry. As the real estate sector continues to recover, the business performance of various realty companies is likely to see sustained improvements, which is expected to yield improved financial performance and better capital market indicators."

The debt-laden property developer had been suspended from trading since March 21, 2022. According to the Hong Kong stock exchange, if a listed company remains suspended for 18 months, it has the authority to delist the company's shares. As of now, the group has been halted from trading for more than 17 months.

Yan said the resumption of China Evergrande's stock trading involved several key steps, including the issuance of long-delayed financial reports, the utilization of bankruptcy protection in the United States to address overseas debt issues, the strengthening of internal assessment to enhance business operations, and proactive investments in the new energy vehicle industry to better alleviate debt pressures.