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Chinese property developer Longfor Group opened 5.5% up in Hong Kong and extended gains to 9.3% to hit HK$23.2 as of 9:43 am local time.
The stock tumbled more than 16% one day earlier on market speculation that the developer have defaulted on a large amount of commercial papers. Longfor said in response that the speculation is false and the company has not issued any new commercial paper since last year.
Longfor currently has 700 million yuan of outstanding commercial paper, which will be paid off by the end of this year, it said.
The Shanghai Commercial Paper Exchange also said that the exchange has no record of Longfor defaulting on any commercial paper by August 10 and market speculation is false.
Citi said in a note on Thursday that it maintains a Buy rating on Longfor Group, saying that the company’s financial discipline will enable it to tackle market challenges in the long term.
