The Daily Update: China property / UK car dealers

Sinic Holdings Group Co, ranked 41stt on the list of China’s biggest property developers as of sales in August, is the latest Chinese property company to fall foul of the authorities cutting leverage in the sector. Sinic missed the coupon and principal payment on its $250million note which matured on Monday. According to Bloomberg, Sinic has $694 million of dollar bonds outstanding and had also missed domestic payments during September. This follows the shock default of Fantasia Holdings Group Co earlier this month. We now await the outcome from Evergrande which has until the end of the week until the grace period ends on interest payments on several dollar bonds which missed payments a little over three weeks ago.

The authorities suddenly, last Friday, broke their silence regarding the fate of the sector saying that risks can be contained from the Evergrande troubles. However, junk bonds hit a decade high yield of 20% earlier this month before regaining some composure at 17%. China‘s economy receives about 30% of gross GDP from the real estate sector and home prices fell in September for the first time in six years. Watch this space, from afar, as we do.

Elsewhere, in the UK, car dealers are having such a tough time sourcing new vehicles that 17% of second-hand cars no more than a year old are now more expensive than the brand-new equivalents. That’s up from 4% at the start of the year as used car buyers last week spent around a quarter more on previously owned vehicles than they did last year. Must be “driving” the new car dealers crazy. Boom Boom.