The Zehnro Properties Group Ltd. has displayed a downward spiral in their bond prices which demonstrates how risky it is to invest in Chinese developer bonds even when repayment is almost definite. The firm’s bond prices have fallen by half, from 93 cents on the USD to 59.3 cents. This followed a disclosure that the company may not proceed with planned redemption and transparency concerns are increasing in the real estate sector in China. Bloomberg have suggested if you are a bondholder investing in low risk bonds then this sector is one to exit due to the extreme price volatility- as shown.
Would you continue to invest in the Chinese Real Estate sector?