Shares in Chinese property companies rose sharply following reports that Beijing may order state-run groups to guarantee some developer bonds issued in the country’s onshore market.The Hang Seng Mainland Properties index rose as much as 10.5 per cent on Tuesday as investors snapped up shares after reports that the state-owned groups could provide support for real estate groups’ renminbi-denominated bond issuance.

Hong Kong-listed shares in both Country Garden and Longfor Properties rose as much as 18 per cent, while those of Gemdale Properties and CIFI Holdings rose as much as 7.6 per cent and 19.4 per cent, respectively.

The rally followed a report by emerging markets intelligence group REDD that five to six cash-strapped property groups had been told policymakers planned to provide them with liquidity support by ordering state groups to underwrite and guarantee their new renminbi-denominated bond issuance.