Monday’s stock trading suspension sent shivering through broader financial markets
Trading in shares of China Evergrande heavily in debt (3333.HK) It was suspended on Monday, days after bondholders said the property developer at the center of panic over China’s financial system had missed a second major bond interest payment.
Shares of its entity Evergrande Property Services Group (6666.HK) The Hong Kong Stock Exchange said that was also suspended. The exchange did not explain why trading in the companies’ stocks was halted, and it was not clear who initiated the suspension.
Evergrande did not immediately respond to a request for comment.
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With liabilities of up to hundreds of billions of dollars, equivalent to 2% of China’s GDP, Evergrande has raised concerns that its crisis could spread through the financial system and resonate around the world. Initial concerns have eased after China’s central bank vowed to protect the interests of homebuyers. read more
Monday’s stock trading suspension sent a shiver through broader financial markets, which are nervous about the contagion, pushing the offshore yuan slightly lower and weighing on the Hang Seng benchmark index, and financial and other developers in particular. are. Guangzhou R&F Properties Co. Ltd (2777.HK) Sunak China Holdings fell 7% (1918.HK) and country garden (2007.HK) Each fell 4%.
Shares of Evergrande are down 80% so far this year, while its asset services unit is down 43% as the group scrambles to raise money to pay off its many lenders and suppliers.
Stocks in its electric vehicle arm, China Evergrande New Energy Vehicle Group (0708.HK), fell as much as 8% early Monday before narrowing losses.
The cash-strapped conglomerate said on September 30 that its wealth management arm has repaid 10% of wealth management products (WMPs), largely owned by onshore retail investors, as of the same date.
Once China’s best-selling property developer and now expected to be one of the largest restructuring companies in the country, Evergrande is prioritizing domestic creditors over offshore bondholders.
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The two offshore payments, which bondholders said failed to reach their due dates, come as the company, which has nearly $20 billion in offshore debt, is due in the next month on bond coupon payments totaling $162.38 million. face the limit.
Beijing is prompting government-owned firms and state-backed property developers to buy some of Evergrande’s properties, telling them to buy the property directly or indirectly, people with knowledge of the matter said last week. told Reuters.
Meanwhile, Chinese property group Hopson Development (0754.HK) said in a statement on Monday that it had suspended trading in its shares, pending an announcement related to a major takeover and potentially mandatory offer by Hopson of a Hong Kong-listed firm.
It was unclear whether the deal pertained to Evergrande Group, and Hopson did not respond to a request for further comment.
Shares of Hopson, with a market value of HK$60.4 billion ($7.8 billion), have jumped 40% so far this year.
($1 = 7.7868 Hong Kong Dollar)
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