Daily Sabah logo

Politics
Diplomacy Legislation War On Terror EU Affairs Elections News Analysis
TÜRKİYE
Istanbul Education Investigations Minorities Expat Corner Diaspora
World
Mid-East Europe Americas Asia Pacific Africa Syrian Crisis Islamophobia
Business
Automotive Economy Energy Finance Tourism Tech Defense Transportation News Analysis
Lifestyle
Health Environment Travel Food Fashion Science Religion History Feature Expat Corner
Arts
Cinema Music Events Portrait Reviews Performing Arts
Sports
Football Basketball Motorsports Tennis
Opinion
Columns Op-Ed Reader's Corner Editorial
PHOTO GALLERY
JOBS ABOUT US RSS PRIVACY CONTACT US
© Turkuvaz Haberleşme ve Yayıncılık 2023

Daily Sabah logo

عربي
  • Politics
    • Diplomacy
    • Legislation
    • War On Terror
    • EU Affairs
    • Elections
    • News Analysis
  • TÜRKİYE
    • Istanbul
    • Education
    • Investigations
    • Minorities
    • Expat Corner
    • Diaspora
  • World
    • Mid-East
    • Europe
    • Americas
    • Asia Pacific
    • Africa
    • Syrian Crisis
    • Islamophobia
  • Business
    • Automotive
    • Economy
    • Energy
    • Finance
    • Tourism
    • Tech
    • Defense
    • Transportation
    • News Analysis
  • Lifestyle
    • Health
    • Environment
    • Travel
    • Food
    • Fashion
    • Science
    • Religion
    • History
    • Feature
    • Expat Corner
  • Arts
    • Cinema
    • Music
    • Events
    • Portrait
    • Reviews
    • Performing Arts
  • Sports
    • Football
    • Basketball
    • Motorsports
    • Tennis
  • Gallery
  • Opinion
    • Columns
    • Op-Ed
    • Reader's Corner
    • Editorial
  • TV
  • Business
  • Automotive
  • Economy
  • Energy
  • Finance
  • Tourism
  • Tech
  • Defense
  • Transportation
  • News Analysis

Evergrande shares in free fall amid fears of property market default

by REUTERS

HONG KONG Dec 08, 2021 - 3:59 pm GMT+3
People walk outside the Evergrande Center of China Evergrande Group in Shanghai, China, Sept. 24, 2021. (Reuters Photo)
People walk outside the Evergrande Center of China Evergrande Group in Shanghai, China, Sept. 24, 2021. (Reuters Photo)
by REUTERS Dec 08, 2021 3:59 pm

China Evergrande Group’s shares hit a record low on Wednesday after a missed debt payment deadline put the developer at risk of becoming the country’s biggest defaulter, even as hopes of a managed debt restructuring calmed fears of a messy collapse.

So far, any Evergrande fallout has been broadly contained. With policymakers becoming more vocal and markets more familiar with the issue, market watchers have said that consequences of its troubles are less likely to be widely felt.

Failure by Evergrande to make $82.5 million in interest payments due Nov. 6 on some United States dollar bonds would trigger cross-default on its roughly $19 billion of international bonds, with possible ramifications on China's economy and beyond.

While the 30-day grace period is over, Evergrande has not announced if the bonds have formally defaulted.

"Without the official announcement, the market will want to wait and see and not give up yet; otherwise, Evergrande's share and bond prices should have tumbled a lot more," said Steven Leung, director of UOB Kay Hian in Hong Kong.

"The market also wants to wait and see what can be done with the local government stepping in now," Leung added, referring to the move by Evergrande's home province to help contain the risk.

Evergrande was once China's top property developer, with more than 1,300 real estate projects. With $300 billion of liabilities, it is now at the heart of a property crisis in China this year that has crushed almost a dozen smaller firms.

Trading in shares of Kaisa suspended

Trading in shares of embattled smaller peer Kaisa Group Holdings was suspended on Wednesday after a source with direct knowledge of the matter said it was unlikely to meet its $400 million offshore debt deadline on Tuesday.

Kaisa, China's largest holder of offshore debt among developers after Evergrande, had not repaid the 6.5% bond by the end of Asia business hours, the person said, which could push the notes into technical default, triggering cross defaults on its offshore bonds totaling nearly $12 billion.

Bondholders owning over 50% of the notes in question sent the company draft terms of forbearance late on Monday, a source previously told Reuters.

Even in the case of a technical default, Kaisa and offshore bondholders would continue the discussions, two sources with knowledge of the matter said.

Record low

Evergrande's shares, which have given up more than 20% this month, were down 6% in the afternoon at HK$1.72 – the lowest since their November 2009 debut. The broader market was steady.

Its notes due last month, one of two tranches with a coupon payment deadline that passed on Monday, traded at 18.6 cents on the dollar, Duration Finance data showed, versus 18.8 from the close of Asia hours on Tuesday.

Kaisa's bond due April 2022 traded at 36.3, little changed from the day earlier but down from 37.8 last week.

The government has repeatedly said Evergrande's problems can be contained and moves to boost liquidity in the banking sector along with the firm's plans to forge ahead with a restructuring of its overseas debt have helped reassure global investors.

The provincial government of Guandong, where Evergrande is based, stepped in last week to help manage the fallout, reinforcing the view that its failure would be managed.

  • shortlink copied
  • Last Update: Dec 08, 2021 5:44 pm
    RELATED TOPICS
    fight-against-terrorism DEUTSCHE-BANK US-LIBYA-RELATIONS
    KEYWORDS
    evergrande crisis property market real estate china debt bankruptcy
    The Daily Sabah Newsletter
    Keep up to date with what’s happening in Turkey, it’s region and the world.
    You can unsubscribe at any time. By signing up you are agreeing to our Terms of Use and Privacy Policy. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
    Percival Lugue, who has the Guinness world record for the largest fast-food toy collection, poses with his toy collection in his home in Apalit, Pampanga province, Philippines, April 20, 2021. (REUTERS Photo)

    Filipino man collects record 200,000 toys from fast-food chains

    TOY-MANIA
    Parts of the newly completed last section of the Northern Marmara Motorway, Istanbul, Turkey, May 19, 2021. (DHA Photo)

    Turkey raises speed limits on highways starting from July

    SPEED-LIMIT

    Türkiye's 1st domestic heavy-class attack helicopter starts engine

    heavy-class-attack-helicopter

    Istanbul's consulate chronicles: Sudhi Choudhary, Consul General of India

    SUDHI-CHOUDHARY
    No Image
    1-horned rhinos in Indian park saved by mud, guns
    PHOTOGALLERY
    • POLITICS
    • Diplomacy
    • Legislation
    • War On Terror
    • EU Affairs
    • News Analysis
    • TÜRKİYE
    • Istanbul
    • Education
    • Investigations
    • Minorities
    • Diaspora
    • World
    • Mid-East
    • Europe
    • Americas
    • Asia Pacific
    • Africa
    • Syrian Crisis
    • İslamophobia
    • Business
    • Automotive
    • Economy
    • Energy
    • Finance
    • Tourism
    • Tech
    • Defense
    • Transportation
    • News Analysis
    • Lifestyle
    • Health
    • Environment
    • Travel
    • Food
    • Fashion
    • Science
    • Religion
    • History
    • Feature
    • Expat Corner
    • Arts
    • Cinema
    • Music
    • Events
    • Portrait
    • Performing Arts
    • Reviews
    • Sports
    • Football
    • Basketball
    • Motorsports
    • Tennis
    • Opinion
    • Columns
    • Op-Ed
    • Reader's Corner
    • Editorial
    • Photo gallery
    • Jobs
    • privacy
    • about us
    • contact us
    • RSS
    © Turkuvaz Haberleşme ve Yayıncılık 2021