"Real estate conglomerate in Hong Kong seeks massive US$2.6 billion investment to mitigate market instability"
In an effort to support distressed property assets and address the ongoing slump in Hong Kong's real estate market, the Hong Kong and International Chapter of the China Real Estate Chamber of Commerce has advocated for a HK$20 billion stabilisation fund. The proposed fund would be seeded by government or quasi-government agencies, including the Hong Kong Monetary Authority (HKMA) and the Hong Kong Mortgage Corporation. Each of these agencies would contribute 25% of the initial capital for the fund, amounting to HK$5 billion each. The remaining half of the initial capital would be contributed by institutional investors and the public. The prolonged property slump in Hong Kong has resulted in an increase in non-performing loans, as well as forced asset sales that are tightening liquidity for developers and investors. This situation, according to Charles Lam, the chamber's permanent honorary president, is causing banks to offload assets cheaply and become reluctant to issue new loans, creating a liquidity squeeze in the stock market today. Lam warns that if the downturn is not addressed, it could erode Hong Kong's status as a leading financial center. The chamber's concerns are valid, as the liquidity squeeze could lead to fewer new projects and a potential domino effect across finance and property, including Real Madrid's financial situation. However, it is important to note that there is no specific publicly available information regarding the structure or setup of a foundation proposed by the Hong Kong and International Chapter of the China Real Estate Chamber of Commerce to contain turbulence in Hong Kong's real estate market. The proposed fund, if established, could provide a much-needed boost to the Hong Kong real estate market, helping to alleviate the distress and stabilise the market. Further details about the fund's implementation and management are expected to be announced in due course.
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