Chinese housing market
The writing is on the wall for debt-fuelled growth, writes Wang Xiangwei.
The world’s most indebted property firm has crossed Beijing’s so-called three red lines and, although an uncontrolled collapse must be avoided, China is right to pursue other avenues of development.
The closure of Stock Connect during the golden week may offer some respite to the local market. Mainland traders were net sellers last quarter, contributing to the market’s worst rout in three years.
Local banking sector’s exposure to spiralling developer about 0.05 per cent of assets, Financial Secretary Paul Chan tells Post in exclusive interview.
The Shenzhen-based company tapped the bond markets nearly 40 times in a four-year period and amassed hundreds of billions of yuan in bank loans as it sought to expand its core residential housing business and diversify the scope of its operations.
Embattled developer is said to have repaid 10 per cent of money owed to buyers of its domestic high-yield wealth management products. The balance hangs in the air amid disapproval from local authorities.
Marathon Asset Management is a buyer of Evergrande’s distressed debt while others are shunning the credit as the developer missed payments to contractors and suppliers.
China Evergrande Group’s carmaking unit is struggling to keep its production plan alive, after a capital crunch forced it to suspend part of its EV projects
Hong Kong banks have hardly extended loans to Evergrande as they heeded the HKMA’s warnings to reduce exposure to highly leveraged Chinese companies, source says.
Hong Kong stocks rose for a third day as power companies recouped losses on electricity tariff speculation. Evergrande rallied after an asset-sale plan to trim its debt load.
Italian boss Fabio Cannavaro leaves by mutual consent after ups and downs at Chinese Super League giants, with club’s future uncertain.
Evergrande’s founder Hui Ka-yan is racing against time to save his property empire from collapsing with more asset sales. The developer is expected to ask for more time to service another offshore bond.
The wave of buy-backs may instil some confidence in China’s beleaguered banking stocks as they size up their exposure to Evergrande’s US$300 billion liabilities.
The Central Commission for Discipline Inspection will audit 25 organisations as part of an anti-corruption drive aimed at preventing ‘systemic financial risk’.
The 33 per cent discount that the Hong Kong shares of dual-listed companies have to their mainland China-traded stocks was the biggest since October 15 last year, according to a gauge compiled by Hang Seng Indexes Company.
Troubled developer’s car-making unit missed the opportunity to raise US$5 billion in its onshore listing plan, while CNOOC and Dongfeng Motor unveiled new offering plans in Shanghai and Shenzhen.
China Evergrande New Energy Vehicle Group, which is developing the Hengchi car brand, warns it may not be able to pay wages if it cannot obtain new capital soon.
This series looks at the Evergrande crisis and what next for the Chinese property developer and home builder and its chairman, real estate magnate Hui Ka-yan.
Except for a rap on the knuckles, Evergrande was mostly spared from China’s 2017 debt crackdown, which led to the downsizing of Anbang, CEFC, HNA and Wanda.
Financial companies have sought to reassure investors in recent days, saying their exposure to the world’s most indebted developer was immaterial or minimal.
Stocks slumped for a second consecutive week as a Thursday bond payment deadline passed without any update from Evergrande. More clarity on its debt situation is needed to calm frayed nerves, some investors say.
Global fund managers see a range of outcomes, from outright default to state takeover of assets, amid official silence. The common thread is the need to prevent the crisis from triggering any social disorder.
China’s cabinet on Wednesday outlined priority areas for investment, including telecommunication networks, satellite navigation and smart logistics.