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S&P lifts developers' short-term outlook to 'neutral'

(China Daily/Agencies)
Updated: 2009-08-05 07:51

Chinese developers' short-term outlook was raised to neutral from negative by Standard & Poor's on a recovery in the nation's real estate market.

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"Improved operating conditions have reduced the risk of refinancing, deteriorating financial performances, and tight liquidity among developers," Bei Fu, credit analyst at S&P, said in a report. "The severe downturn in China's residential real estate sector that began in late 2007 appears to be over for now, with industry sales rising sharply in the first half of this year."

Liquidity pressure on the developers has alleviated partly because more funding channels become available at home and abroad, helping credit profiles of some businesses in the first six months this year, according to the credit assessor.

Volatility is expected to continue due to China's tentative economic recovery, possible policy changes and signs of a property bubble, Fu said in the report.