The Evergrande threat hits China and Hong Kong assets

Changes in Chinese corporations

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Shares in China and Hong Kong’s economy have declined sharply over the past decade as the growing economic crisis for Evergrande developers is showing signs of spread beyond the region.

Evergrande, the world’s largest debtor, is facing more than $ 300bn in debt and other businesses as well as the deadline for foreign interest payments on Thursday.

Shares listed by the company in Hong Kong fell to 18.9% on Monday. The dot was sealed concerns about overall health of the real estate sector in China and launched a major sale, sending a post to Hang Seng Property, which follows a record twelve, a decrease of about 7%, down from 2016.

The number of Hang Sengs in Hong Kong fell by 3.7%, down by about 12% a year.

Evergrande, whose share has dropped because it warns of constant risk last month, he said senior management would suffer “severe punishment”After receiving the first interest on his business he later told the stockbrokers that he would not repay on time.

The sale in Hong Kong showed that fears of growing economic sector were attracting other manufacturers and financial institutions. Real estate companies, which account for more than a quarter of China’s economic growth, have been forced to fend for themselves debt reduction.

“Evergrande is just the tip of the iceberg,” said Louis Tse, senior manager at Wealthy Securities, a corporate retailer in Hong Kong. Chinese retailers have been under a lot of pressure on debt restructuring, he added, as markets feared that Beijing would force real estate agents to reduce house prices in China and Hong Kong.

“This also applies to banks – if you have low housing prices what happens to repaying their loans?” That said. “It’s very touching.”

Shares in Ping An, China’s largest insurance company, fell nearly 8.4% on Monday, after which closing 5 percent On Friday when he was forced to reveal that he had not received Evergrande’s interest. Ping An has Rmb63.1bn ($ 9.8bn) visible on real estate shares across the country for Rmb3.8tn of its insurance premiums.

The insurance agent took over $ 3.2bn hit in the first half of the year the infidelity of China Fortune Land Development, a developer based in commercial parks north of Hebei.

Other Chinese producers including the Fantasia Group, which was downloaded last week by Fitch, a consulting firm and Guangzhou R&F, have also been under pressure in recent weeks. On Friday, Reuters reported that Beijing had told wealthy Hong Kong people at the closing meetings to take action to reduce housing shortages in the city.

Signs of a slowdown in China have also affected steel prices, which were achieved this year but fell last week after markets collapsed. metal production barriers.

On Monday, Singapore’s steel futures fell 11.5% to $ 100 per ton for the first time in more than a year. Iron prices had fallen 20% last week, theirs the worst every week since the 2008 financial crisis.

China’s foreign exchange market closed on public holidays, but the future of FTSE China A50 sold in Singapore fell by almost 4.3%.