Embarrassed Chinese Stock Trading Evergrande Stops in Hong Kong

File Photo: The sign of the China Evergrande Center building can be seen on September 23, 2021 in Hong Kong, China.Reuters / Tyrone Shiu

October 4, 2021

Hong Kong (Reuters)-A large amount on Monday, a few days after some bondholders said real estate developers at the heart of the turmoil over China’s financial system missed the payment of the second major bond interest rate. Trading of debt-bearing Chinese Evergrande shares has been suspended.

According to the Hong Kong Stock Exchange, shares in its unit, the Evergrande Property Services Group, have also been suspended. The stock exchange did not say why the trading of the company’s stock was suspended, and it was unclear who started the suspension.

Evergrande did not immediately respond to the request for comment.

With hundreds of billions of dollars in debt, equivalent to 2% of China’s gross domestic product, Evergrande has raised concerns that the problem could spread throughout the financial system and spread around the world. Initial concerns have eased somewhat after China’s central bank has vowed to protect the interests of homebuyers.

The stock trading outage on Monday shook the wider financial markets, which remained nervous about transmission, lowered offshore yuan a bit, and squeezed the Hansen Benchmark Index, especially finance and other developers. Guangzhou R & F Property Co., Ltd. decreased by 7%, Sunac China Holdings and Country Garden decreased by 4% each.

Evergrande’s stake has plummeted 80% so far this year, but its real estate services sector has fallen 43% as the group scrambled to raise money to pay many lenders and suppliers.

Shares in the electric vehicle division China Ever Grande New Energy Vehicle Group lost after falling 8% early Monday.

The cash-stricken group announced on September 30 that its wealth management division has repaid 10% of its wealth management products (WMP), which are primarily owned by onshore retail investors.

Once the best-selling real estate developer in China and now expected to be the subject of the largest restructuring in the country, Evergrande has prioritized domestic creditors over offshore bondholders.

The two offshore payments that bondholders said did not arrive by the due date are due to the company, which has nearly $ 20 billion in offshore debt, faced a deadline for a total of $ 162.38 million in dollar bond coupon payments the following month. ..

Beijing told Reuters last week that it urged government-owned businesses and state-owned real estate developers to buy some of Evergrande’s assets and is investigating the purchases directly or indirectly.

Meanwhile, Chinese real estate group Hopson Development said in a statement Monday that it had suspended trading shares while waiting for Hopson to announce a major takeover of a Hong Kong-listed company and the possibility of a compulsory offer.

It was unclear if the transaction was related to the Evergrande Group and Hopson declined to request further comment.

Hopson’s stock, with a market value of HK $ 60.4 billion ($ 7.8 billion), has skyrocketed 40% so far this year.

($ 1 = 7.7868 HK $)

(Report by Anne Marie Roantree and Donny Kwok, additional report by Tom Westbrook in Singapore, edited by Kim Coghill and Kenneth Maxwell)

Embarrassed Chinese Stock Trading Evergrande Stops in Hong Kong

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