Investors could expect more Chinese property developers to default on bond payments, but troubles in the real estate sector have not spilled over to other industries, an analyst said Tuesday.
Financial distress among Chinese real estate firms came to forefront in the last few months as Evergrande and other developers struggled to repay their debt. Evergrande appeared to have averted a default after reportedly remitting funds for an interest payment last week.
“Most likely we are going to see more defaults … of these developers,” Bo Zhuang, senior analyst at investment firm Loomis Sayles, told CNBC’s “Street Signs Asia.”
The analyst said the increase in bond defaults should be gradual, with Chinese authorities marginally easing some policy measures that have weighed down the real estate sector.
He noted that housing sales in China have stopped declining in the last two weeks, which is “a good sign.” That has made the…