Finace And Stock

Sunac Leads Rebound in Chinese Property Stocks

Sunac China Holdings Ltd.


1918 14.81%

led a rebound in Chinese property stocks Tuesday, after the real-estate developer played down a leaked request for government help and the country’s central bank signaled its support for the sector.

Sunac, which is listed in Hong Kong, said on an official social-media account that the text was a draft by a company representative who was preparing to speak with local-government officials in the eastern city of Shaoxing. It said the draft had leaked after the representative accidentally shared it with a real-estate chat group.

“Our company has never had, nor has any need or willingness to submit a similar report to the government. We apologize for misleading the public!” Sunac said on Tuesday. The company added that its projects across China were operating normally and that sales were good.

Sunac shares jumped 15%, reversing most of their steep losses in the previous two sessions, which had sent the company’s stock to its lowest in more than four years.

Shares in many of Sunac’s rivals jumped, too, buoyed by a notice from the People’s Bank of China. After a meeting of its monetary-policy committee, the central bank said late Monday that it would “maintain the healthy development of the property market and safeguard the legitimate rights and interests of house buyers.”

Stock in

Country Garden Holdings Co.


2007 5.89%

,

China Vanke Co.


000002 6.41%

and

China Overseas Land and Investment Ltd.


688 5.91%

all jumped by about 6% to 7%.

China Evergrande Group,


EGRNF 6.92%

the real-estate giant that has fallen behind on a payment to international bondholders, also rose nearly 5%. Shares across the sector have been volatile in recent days.

Investors interpreted the central bank’s message as a positive signal that authorities could fine-tune their property policies to maintain financial and social stability, said

Bruce Pang,

head of macro and strategy research at China Renaissance Securities.

While Beijing is unlikely to reverse its clampdown, it could ease curbs on mortgages and guide the restructuring of some property giants, Mr. Pang said.

Despite Tuesday’s rally, Carlos Casanova, a senior economist for Asia at Union Bancaire Privée, said he remained cautious on the sector.

“Even though some of these companies have better fundamentals, they are still subject to the sector’s contagion risks from Evergrande, macroprudential rules to decrease leverage and are also affected by the top-down drive to curb housing price speculation,” Mr. Casanova said.

“On the debt side, the sector also faces high debt maturities for the rest of the year and into 2022, so we expect that to also contribute to more volatility.”

Sunac’s dollar bonds also regained some ground from Monday’s levels. A batch of 7% bonds due in July 2025 was quoted at about 84 cents on the dollar by midafternoon, according to Tradeweb. They had been quoted above 98 cents on the dollar at the start of the month.

Write to Xie Yu at Yu.Xie@wsj.com

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