KUALA LUMPUR, Sept 8 (Bernama) -- Bursa Malaysia closed almost flat on Tuesday as buying interest rotated away from index heavyweights towards smaller-cap construction stocks, with sentiment affected by geopolitical uncertainty, said an analyst. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) eased 0.39 of a point to 1,714.40 from Monday’s close of 1,714.79. The benchmark index opened 1.65 points lower at 1,713.14 and moved between 1,710.44 and 1,714.50 throughout the trading session. The broader market was almost evenly balanced, with decliners leading gainers 548 to 546, while 598 counters were unchanged, 1,107 were untraded and 25 were suspended. Turnover expanded to 4.13 billion units valued at RM3.14 billion from 3.60 billion units valued at RM2.45 billion on Monday.
Despite years of intervention, China’s property crisis is still spiraling — and even state-linked giants like China Vanke are now buckling under the pressure.
The Latest Blow: Vanke’s Record Loss
China’s fifth-largest developer, Vanke, posted a 49.5 billion yuan ($6.8B) annual loss in 2024 — its first since listing in 1991. The loss was deeper than expected and reignited fears about the sector’s collapse, showing that even “safer” names are vulnerable.
What happened?
Vanke’s home sales dropped to a 10-year low.
It received emergency loans from its top shareholder (Shenzhen Metro Group).
Its chairman and CEO resigned in early 2025.
How Did It Get This Bad?
The Real Estate Boom (1998–2020)
Urban population exploded, homes became the top investment asset.
Prices surged 6x in 15 years.
Developers pre-sold homes and borrowed heavily, often opaquely.
The Crackdown (2020 Onward)
China introduced the “three red lines” policy to reduce debt in the sector.
Financing dried up. Defaults began.
The poster child? Evergrande, which collapsed under $300B of debt.
COVID & Economic Drag
Lockdowns halted construction.
Households turned frugal amid job insecurity and falling income.
Property prices began to plunge.
The Damage So Far
400 million m² of newly completed homes remain unsold.
Mortgage delinquencies are at a 4-year high.
Households hold 145% debt-to-income ratio.
Vanke, Evergrande, Country Garden, and Sunac have all suffered major financial stress or default.
What’s The Government Doing?
Beijing has rolled out multiple rescue measures since 2022:
Injected ¥200B in special loans to revive stalled projects.
Loosened mortgage rules and slashed rates.
Eased restrictions for homebuyers in big cities.
Provided emergency financing for key developers.
Still, none of this has reversed the trend. Confidence remains weak.
What Could Be Next?
Authorities are considering:
Further interest rate cuts (PBOC repo rate now at 1.5%).
Removing restrictions for non-local buyers in major cities.
Relaxing rules on second-home purchases.
But with declining home values, rising household debt, and weak job growth — stimulus alone may not be enough.
Key Takeaway for Investors
The Chinese property sector is no longer the economic engine it once was. Government action may stabilize the situation but not reignite growth. Risk remains high — especially for developers and banks with high real estate exposure.
Watchlist:
Country Garden (2007.HK)
China Vanke (000002.SZ)
Evergrande (3333.HK)
Bank of China (3988.HK)
📊 USD/CNY: 7.18
🏦 PBOC rate: Expected to fall further in 2025
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