China considers authorizing unlisted property companies to issue bonds  

监管层酝酿非上市房企发公司债 救市意图明确

(ECNS) -- China may allow unlisted property developers to raise funds in the bond market to further stimulate the housing sector, Economic Information Daily reported, citing insider knowledge.

Authorities are considering giving the green light to private companies, including those in real estate, to issue corporate bonds on the Shanghai Stock Exchange. The move is considered to boost the housing market as well as speed up consolidation of China's fragmented bond sector.

China's property developers have seen their pockets shrinking due to declining sales and falling prices. Small and medium-sized developers are experiencing a stronger squeeze as their bigger, listed peers have access to more financing channels.

"It's a very obvious signal that the government is trying to save the housing market," said Xu Hanfei, analyst with Guotai Jun'an Securities.

The move is also considered as a step closer to an integrated bond market, which is currently supervised by three parties -- the central bank, the National Development and Reform Commission (NDRC), as well as the Securities Regulatory Commission (CSRC).

Authorizing the CSRC with bond approval and supervision is the right direction to go, as the NDRC should be in charge of macro economic activities, analysts say.

Shi Lei, an analyst with Ping'an Securities, warns of a cold reception, however, as lenders usually prefer well-known real estate companies and may refrain from buying bonds from small developers.