Shares of the Chinese property firm Evergrande surged on Wednesday, up to 82%, leading the gains on the Hang Seng Index. Since then, the shares have given back some of their gains but were still up by roughly 70%.

The real estate sector was the biggest winner on the HSI (Hang Seng Index), but the overall index remained in negative territory, partly due to declines in healthcare and industrial sector stocks.

Other stocks such as Country Garden Holdings and Logan Group also saw sharp increases, gaining as much as 26% and 28%, while the Hang Seng Mainland Property Index rose by about 4%.

These gains followed news that Country Garden had managed to pay $22.5 million for coupon payments on its bonds on Tuesday.

Originally, the bond coupon payments were due in August, but Country Garden sent them in just hours before the 30-day grace period for the delay expired.

The Chinese property sector had been declining since Evergrande went bankrupt in 2021.

Last week, the shares resumed trading and ended their first session in nearly 17 months almost 80% lower.

Evergrande’s shares closed at 35 Hong Kong cents on Tuesday.

Other property-related stocks have also seen sharp declines over the past year due to concerns about contagion. Country Garden’s shares have fallen 53% this year, while Logan has dropped by 18%.

On Friday, China’s state-run Securities Times published a commentary calling for the swift removal of “policies restricting home purchases in cities outside the hottest first-tier cities,” as reported by CNBC.

The commentary argues that, “Given the current situation of significant changes in the supply-demand relationship in the real estate market, it is no longer suitable to maintain the restrictive policies previously introduced to curb speculation.”

The commentary concluded that it is “urgently necessary” to enhance policy support to boost sales and thus release the demand suppressed by these stringent housing policies.

Source: CNBC.com