Real estate seal lifted

Practice has proven that real estate is not only an old favorite, but also a favorite.

Seeing the stock market waning and the economy sluggish, the SEC suddenly released a big move after the capital market closed on Nov. 28.

The main content includes the following articles.

First, the resumption of mergers and acquisitions and complementary financing of listed companies involved in housing, allowing eligible real estate enterprises to implement reorganization and listing.

Second, to resume the refinancing of listed real estate enterprises and listed companies involved in real estate, allowing listed real estate enterprises to refinance in a non-public manner.

iii. Allowing refinancing of H-share listed companies with real estate as their main business.

iv. Encouraging high-quality issuance of REITs, or as expansion assets for listed infrastructure REITs.

V. Allow private equity to set up real estate private investment funds.

Damn, you can look at these articles; it is simply a knife to the flesh ah!

So you see, the day before yesterday’s real estate listed companies, a string of stops, even real estate ETFs are up, that is, the day before yesterday, as long as the real estate development companies, all up, after being continuously suppressed for more than 3 years, listed companies in the real estate industry, this hand seems to be the “bitter sweet”.

In fact, this has been the past month, the Nth “revitalization of the real estate industry” of the specific policy, also known as the ultimate “big move” of the real estate bailout policy, before the real estate bailout policy has long been “three arrows the “three arrows” of the real estate rescue policy.

October 28, the State Council on the financial work of the report proposed to maintain a smooth and orderly real estate financing, to meet the rigid and improved housing demand, to support the protection of the delivery building, stable livelihood, and promote the establishment of a new model of real estate development.

On November 8, news from the website of the China Interbank Market Dealers Association showed that with the support and guidance of the People’s Bank, the dealers association continued to promote and expand private enterprise bond financing support tools to support private enterprises, including real estate enterprises, to issue debt financing, which is expected to support about 250 billion private enterprise bond financing, with further expansion as appropriate.

More than 10 days ago, the People’s Bank of China and the CBRC jointly issued a notice on the current financial support for the stable and healthy development of the real estate market (the Notice), which launched 16 financial initiatives to promote the stable and healthy development of the real estate market.

On November 21, the People’s Bank of China and the CBIRC jointly held a national symposium on commercial banks’ credit work to study and deploy financial support for the implementation of policy measures to stabilize the economy in general, with the intention of providing 200 billion Yuan in refinancing to commercial banks before March 31, 2023, and supporting commercial banks to provide matching funds for supporting the “guaranteed delivery of buildings “.

You know, in addition to the private “illegal fund-raising”, any Chinese enterprises want to get money, get a line of credit, it is only from commercial bank loans, bond financing, equity financing these three roads, this is the so-called “three arrows” meaning.

These three financing paths, equity financing is the first to be blocked, then, bank loans and bond financing these two roads, but also in the last three years gradually by the policy restrictions and seals, resulting in real estate developers this year began a large area of lightning, rotten buildings, runaway news.

In the past month, first let go of bond financing, and commercial bank loans, just short of equity financing this one way. November 28th SEC press conference, even if the equity financing this piece to make up, so naturally also by the market as the ultimate move to save the real estate industry

Why is it a big move?

The refinancing of listed real estate companies was suspended in October 2010. In April of that year, the State Council issued a notice known as the ‘New National Ten’, which explicitly requires that, the real estate development enterprises with idle land and lands speculation, the securities regulator to suspend approval of its listing, refinancing and major asset restructuring. In October of the same year, the SFC issued a notice stating that in order to firmly implement the spirit of the ‘New Article 10’; it has suspended the acceptance of applications for restructuring of real estate development enterprises, and will seek the opinion of the Ministry of Land and Resources for those already accepted.

This suspension, which has stopped until now, this time to release equity financing, equivalent to re-open another door of financing for real estate enterprises after 12 years.

November 28 after the close of the equity financing release had policy, 29 immediately real estate companies cannot wait to finance, it can be said that “a moment cannot wait”.

In the evening of November 29, Hsiao (600823.SH) and Foxing (000926.SZ) both released announcements that they intend to plan a non-public offering of shares, the number of shares to be issued, not exceeding 30% of the total share capital of the company before the issue – that is to say, the two companies, at once, will be The current market equity dilution of nearly 30% of the stock.

In the end, it’s still our big A-shareholders’ money that works well.

Since the seal of bank loans, bond financing and equity financing has all been lifted, some irresponsible self-media began to shout, real estate resurrected, the spring of real estate is coming back, we rush to buy houses ah!


The reason for this policy is very simple, is because the past 2 years more than the real estate enterprise financing chain was cut off, the enterprise has generally appeared liquidity crisis, and real estate enterprises are the “backbone” of China’s private enterprises, and the entire social financing chain are inextricably linked, and then not save, not only dragging down the economy. If not rescued, it will not only drag down the economy, but may even cause a total financial crisis in China.

A person’s heart is about to stop, rush to give him electric shock, infusion, just to let him first slow down, not immediately die, as to whether he can completely get better, or even alive again to go to the discotheque to bounce drugs, this is another thing.

Some people ask, then China’s real estate in the end can still spring back, the price of housing will not rise?

This question, in fact, I have written several times in previous articles, in the end, it still depends on whether the residential sector has money and is willing to leverage to buy houses.

Whether or not they have the money depends on how high the ratio of disposable income to debt is in the residential sector.

Whether they are willing to do so depends on how high the housing prices in China’s big cities are.

On the question of whether the residential sector has money, I have compared the residential sector in China, the United States and Japan, and concluded that the leverage of the residential sector to buy houses in China has been increased to the highest, higher than the United States and Japan on the eve of the bursting of the real estate bubble, which means that, in the case of no significant devaluation of the RMB, it would be good if the housing prices in China could be basically maintained, and there is no more money to take over.


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