(Yicai Global) Aug. 27 -- International rating agency Standard & Poor has downgraded China Vanke Co., Ltd. [SEHK:02202], China's largest real estate developer, from "Stable" to "Negative,", due to the ongoing struggle for ownership between major shareholders and executives.
Although Vanke maintained its credit rating of "BBB+", this did little to allay market fears and the prices of Vanke A-share and H-share accordingly fell rapidly. S&P published their rating report on Aug. 24, stressing that Vanke's equity dispute may affect the stability of their business operation and the previously sound financial discipline of the enterprise.
The position of senior executives has been undermined, and S&P believe the current stalemate will affect the competitiveness of the enterprise.
Vanke A Share fell by 1.74 percent in the early trading and continued to drop in the afternoon. The greatest rate of decrease before end-of-day closing reached 3.81 percent. In the H-share market, Vanke fell by 0.8 percent in the morning and the greatest rate of decrease before closing reached 1.39 percent.
Vanke signified it would closely watch the market reaction to the rating prospect change and strengthen the communication with financial institutions and investors. It hoped the change will not bring negative influence upon the financing of the enterprise in the short run.