KUALA LUMPUR, Jan 23 (Bernama) -- Bursa Malaysia’s benchmark index recouped earlier losses to settle higher, maintaining a more than six-year high, buoyed by continued buying interest in technology stocks, while the strengthening of the ringgit against the US dollar further lifted investor sentiment. At 2.27 pm today, the local currency strengthened to 3.9992 versus the greenback, its strongest level in more than seven years. It was last seen at this level on June 18, 2018, at 3.9960/9990. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 2.85 points or 0.17 per cent to 1,719.99 from yesterday’s close of 1,717.14. The index surpassed its previous peak of 1,719.00 recorded on Feb 26, 2019. The barometer index opened 1.30 points lower at 1,715.84 and moved between an intraday low of 1,711.89 in early trade and a high of 1,723.41 in late afternoon before slipping slightly toward the close. However, market breadth was negative with decl...
China Vanke has secured creditor approval to extend repayment on a yuan-denominated bond, easing near-term default risks for one of the last major Chinese developers still standing amid the sector downturn.
According to a filing with the Shenzhen Stock Exchange, 92.11% of bondholders who exercised a put option on Vanke’s 1.1 billion yuan bond voted in favour of a revised proposal that includes an upfront cash payment. Under the plan, Vanke will repay 40% of the 1.03 billion yuan owed by Jan 30, with the remaining balance deferred until Jan 22, 2027.
Why the Vote Matters
The approval gives China Vanke Co crucial breathing room as it navigates an unprecedented property slump while carrying nearly US$50 billion in interest-bearing liabilities. It also signals that holders of two other bonds originally due last month may be open to similar extensions, with votes scheduled later this month.
Market Reaction & Investor Concerns
Vanke’s dollar and yuan bonds rallied last week after the revised terms were announced. Even so, its dollar bonds continue to trade around 23 cents on the dollar, underscoring persistent investor concern over longer-term solvency as more maturities loom this year.
Government Pressure & Funding Questions
Authorities have asked Vanke to prepare a comprehensive restructuring plan, potentially involving deep haircuts for creditors. Questions remain over the source of funds for the upfront cash payment. The developer scrambled for liquidity in December after state-owned shareholder Shenzhen Metro Group Co scaled back support, having already extended more than 30 billion yuan in loans beyond its obligations.
What’s Next
Any default could trigger cross-default clauses across Vanke’s debt stack, raising systemic risks. Some offshore bondholders have recently been approached by Houlihan Lokey Inc and PJT Partners, indicating early-stage coordination among creditors.
Investor Takeaway
Short-term default risk reduced, but leverage remains heavy
Creditor flexibility improving, aided by upfront cash sweeteners
Restructuring risk remains high with more maturities ahead
Vanke has bought time, not solved its balance-sheet problem. The next bondholder votes — and the scope of any government-backed restructuring — will be key to determining whether this relief turns into a durable solution.
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