![]() And concerns are mounting that if it defaults on its debt, it could spell disaster for China’s property market and send. "It’s a big one, to be sure, but one that can be handled within the system. China Evergrande Group is deeply in the red to the tune of 300bn. "Despite the worry, so far this looks like a corporate bankruptcy and not something worse," said Brad McMillan, chief investment officer for Commonwealth Financial Network in a recent note. Still, many market participants believe the fallout from Evergrande is likely to be contained. Other bondholders include UBS Asset Management and Amundi, Europe's largest asset manager. BlackRock and investment banks HSBC and UBS have been among the largest buyers of Evergrande's debt, Morningstar data and a blog post showed. Some funds have been increasing their positions in recent months. Analysts have said the potential Evergrande deal signals the company was still working. read moreĪsked at a regular daily briefing on Wednesday whether China would take measures to intervene, foreign ministry spokesman Zhao Lijian only referred to the "responsible departments". It has 500 million in bond coupons due by year-end, followed by a 2-billion dollar bond maturity in March. There is also mounting political pressure to act as the anger of retail investors with their savings sunk in Evergrande properties or wealth management products swells. “The reality is that it will take weeks to figure out the impact on growth given the impact on the real estate market.” housing market, with many analysts dismissing this comparison,” wrote Sebastien Galy of Nordea Asset Management in a recent note. “There are now comparisons being made between Evergrande with the collapse (of) Lehman Brothers and the crash in the U.S. Only some $20 billion of $305 billion outstanding debts is owed offshore, according to Refinitiv data.īut the risk of failure remains high, particularly if offshore bondholders are less willing than those in China to cut deals, and the fallout has already begun to trigger tremors in the property market of the world's second-largest economy. BREAKDOWNĪnalysts have been downplaying the risk that a collapse threatens a "Lehman moment", or liquidity crunch, which freezes the financial system and spreads globally. dollar slipped while the S&P 500 rebounded from recent losses. Its dollar bonds maturing next year and in 2024 remained below 30 cents on the dollar. Evergrande's Hong Kong shares did not trade due to a public holiday but rose 40% in Frankfurt to 0.38 euros ($0.45).
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