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- China Evergrande stock jumped as much as 82% Wednesday, leading other Chinese property names higher.
- The sector's rally followed Country Garden's $22.5 million in bond payments made Tuesday to avoid a default.
- Also lifting shares was commentary in the state-owned Securities Times, which called for further easing of restrictions on the property market.
Shares of China Evergrande rallied as much as 82% on Wednesday, leading a rally in Chinese property stocks that included Country Garden Holdings and Logan Group.
The sector-wide jump followed Country Garden's near-miss on a default after it was able to pay $22.5 million in bond coupon payments Tuesday. Those had originally been due in August, but the troubled developer paid them hours before the 30-day grace period concluded.
Evergrande hovered around 0.64 Hong Kong dollars after paring some of its early gains, while the Hang Seng Mainland Property Index climbed about 4%. Country Garden and Logan jumped as much as 26% and 28%, respectively.
Also lifting shares Wednesday was commentary in China's state-owned Securities Times, which called for further easing of restrictions on the property market.
That comes after Beijing has already introduced a raft of measures to prop up the real estate sector and the broader economy.
Meanwhile, Evergrande — a former $50 billion real estate giant that last month filed for Chapter 15 bankruptcy protection — remains the world's most indebted property developer.
On August 28, shares crashed 87% to trade in penny-stock territory. That marked the first day trading resumed for the company after a 17-month halt.
Days prior, a company filing showed a loss of 33 billion yuan in the six months up to June 30, adding on to the 582 billion yuan in losses from the last two years.
China's faltering property sector has fueled concerns of a potential "Lehman moment" that could drag on the broader economy, which is also dealing with a range of separate issues such as youth unemployment as well as softening consumption and manufacturing.
Citi analysts in August pointed to default worries for firms like Zhongront Trust — a shaky shadow bank with huge exposure to real estate — as reason for concern, but they, along with other experts who spoke with Insider, also said rigorous state regulations and policy should be able to curb any cascading impacts.
"There isn't going to be a sudden sharp shock or dramatic loss of confidence or financial stability," Nicholas Spiro, a partner at real estate consultancy Lauressa Advisory, told Insider in a recent interview. "Rather, it'll be a slow-moving, structural economic crisis that could last for years. We are seeing a deep-seated, economic malaise which will be very prolonged."