The Shanghai Stock Exchange suspended trading in several bonds of Chinese property developer Shimao, a day after the company’s failure to make a loan payment increased fears that a cash crunch will spread more widely across the country’s embattled real estate industry.
Trading in three renminbi-denominated bonds from the residential developer, which unlike many of its struggling peers recently held an investment-grade credit rating, was temporarily suspended after sharp falls followed reports on Thursday of the missed payment.
The problems at Shimao suggested that China’s real estate sector woes, which have mainly affected companies with riskier credit ratings such as Evergrande and Kaisa Group, could spread to more highly rated developers as they grapple with a slump in housing sales and a loss of investor confidence.