European stocks hit three-week high as China’s government tries to prop up ailing economy
The share price of the ailing Chinese developer Country Garden has jumped by as much as a fifth after its creditors agreed a delay on debt repayments, offering some respite from the country’s crisis-hit property market.
The company agreed over the weekend to extend the payment dates on a 3.9bn yuan (£430m) private bond, to the relief of investors who had thought it would default on payments due on Saturday. Country Garden will instead have three years to repay the debt, after it won a narrow vote with the backing of 56% of its creditors, Reuters reported.
Its shares jumped as high as 1.05 Hong Kong dollars on Monday, up from 0.89 dollars on 31 August, the last trading day before a holiday. The deal also helped lift global markets, with European stocks hitting a three-week high.
The giant Chinese property sector, which accounts for about a quarter of the world’s second largest economy, has been hit by a run of crises in recent years, as developers have found themselves overextended after years of excessive borrowing.
