China Property Plunge Worsens as Shimao Deal Raises ‘Red Flag’
(Bloomberg) — Chinese property stocks sank to a nearly five-year low after a deal between two units of Shimao Group Holdings Ltd. heightened corporate governance concerns in an industry already grappling with a liquidity crisis.
Shares of Shimao Group and its property-services unit tumbled Tuesday by the most ever as a Bloomberg index of real estate stocks dropped 4.3% to the lowest level since February 2017. A connected-party acquisition announced by the developer late Monday “not only implies tight liquidity conditions for Shimao, but is also a corporate governance red flag,” JPMorgan Chase & Co. analysts wrote as they downgraded both stocks.
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