China’s biggest commercial banks have pledged at least $130 billion in fresh credit to property developers, bolstering recent regulatory measures to ease a stifling cash crunch in the sector and triggering a rally in property shares.
Three state-owned banks lined up around $99 billion worth of credit lines to developers on Thursday, a day after three other lenders committed $31 billion, responding to Beijing’s call for support.
The authorities have been stepping up measures in recent weeks to support developers, after many defaulted on their debt obligations and were forced to halt construction.
The massive, coordinated injection of liquidity into the property sector buoyed the shares of major developers on Thursday.
Country Garden, China’s top developer by sales, closed more than 20% higher after state media reported on Thursday it had received a credit line from Postal Savings Bank of China worth at least 50 billion yuan ($7.00 billion).
China Vanke, CIFI Holdings and Greentown China rose between 8.4% and 18.4% in Hong Kong.
A gauge tracking the sector, the Hang Seng Mainland Property Index, closed up 6.8%.
Industrial and Commercial Bank of China (ICBC) , the world’s largest bank by assets, said on Thursday that it has agreed to offer 655 billion yuan of financing to 12 property firms including Vanke, Longfor and Country Garden.