KUALA LUMPUR, July 29 (Bernama) -- Bursa Malaysia rebounded to close higher on Wednesday on selective buying of defensive stocks after a volatile trading session. IPPFA Sdn Bhd director of investment strategy and country economist Mohd Sedek Jantan said consumer products and services stocks lifted the key index higher, overcoming lingering geopolitical concerns. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 3.08 points to 1,715.56 from yesterday’s close of 1,712.48. The benchmark index, which opened 1.91 points higher at 1,714.39, moved between 1,710.79 and 1,720.59 during the day’s trading. In the broader market, gainers outstripped decliners 550 to 476, while 612 counters were unchanged, 1,129 untraded, and 48 suspended. Turnover rose to 2.96 billion units valued at RM2.48 billion from 2.94 billion units valued at RM2.56 billion on Tuesday.
China Vanke — once seen as the "too-prudent-to-fail" face of China’s property market — is now asking banks for up to 10 years to repay some of its loans. The move underscores the deep liquidity crisis facing one of China’s largest state-backed developers.
The Ask
Vanke has proposed to major Chinese banks a loan extension of up to a decade, sources tell Bloomberg. Some banks are reviewing the request, while others hesitate — waiting on regulatory signals before committing.
Why now? Because the numbers don’t lie:
361 billion yuan in total interest-bearing debt (as of 2024)
44% of that debt matures within 12 months
258 billion yuan of that debt = bank loans
A Grim First Half
Vanke recently warned of a US$1.67 billion (RM7.09 billion) net loss in 1H2025 — deeper than expected, amplifying its repayment pressure.
Despite being state-backed, Vanke has struggled to withstand China’s 5-year property downturn. Buyers vanished, home prices slumped, and developers across the board defaulted.
Banks Are Cautious
Chinese regulators are encouraging banks to support real estate, but it’s not that simple:
Bank net interest margin: 1.43% — an all-time low
Non-performing loans: 3.4 trillion yuan — also a record
While restructuring loans like Vanke’s might ease short-term stress, analysts warn it could mask deeper systemic risksand inflate financial stability illusions.
What Vanke’s Already Done
24.9 billion yuan in new financing/refinancing secured in 1H25
16.5 billion yuan in public debt repaid
Zero offshore maturities until 2027 — some breathing room
Its largest shareholder, Shenzhen Metro Group, has:
Taken over as chairman
Lent 15+ billion yuan this year
Pledged another 6.25 billion yuan recently
MoneyMaster Take:
Vanke’s survival strategy hinges on regulatory support + bank patience + time. A 10-year extension would give it critical runway — but also set a precedent for future bailouts across the sector.
What’s worrying? The underlying debt hasn’t disappeared — it’s just been pushed further out. This may buy time, but not solve structural demand problems in China’s housing market.
What to Watch:
Will Beijing greenlight the 10-year plan?
Will banks prioritize real recovery or defer pain?
Will more developers copy-paste this strategy?
Investment Outlook:
China property sector: Still high-risk, despite state support. Only the top-tier, politically backed names have a chance.
Chinese banks: Watch NPL ratios and lending appetite. This loan deferral wave may inflate balance sheets but deflate investor confidence.
Vanke bonds: Short-term relief could boost prices, but watch for volatility spikes if talks stall or banks say no.
Bottom Line:
China Vanke is trying to survive the storm, not sail through it. A decade-long extension may help — but without real demand recovery, it’s just delaying a reckoning.
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