(Bloomberg) China Evergrande Group was suspended from trading in Hong Kong pending an announcement containing “insider information”.
The developer is said to be holding a call this week to brief investors on its debt restructuring plan.
Here we have yet again another global suspension that may potentially affect the entire markets and we’re going to discuss it today.
Welcome to Franknez.com – Evergrande is being suspended from trading in Hong Kong as investors push for their money. This is crazy!
Let’s dive right into it!
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Hong Kong halts trading of Evergrande
Evergrande and its other units suspended stock trading in Hong Kong (3/21).
The company’s offshore bonds were also halted in the process.
Evergrande has been at the center of a crisis among Chinese property developers following Beijing’s crackdown on borrowing.
It said in January that it aimed to present a preliminary restructuring proposal in the next six months.
Evergrande has been on the brink of default for months now since last year.
Its bondholders approved a payment plan regarding overdue yuan-bond interest, so investors aren’t giving up.
Massive selloff of Nanjing unit
Evergrande Group’s onshore unit will sell its 30% stake in Nanjing property company for an undisclosed sum.
The Nanjing property company, focused on valuation and management services, was set up in June 2020 with registered capital of 66.7 million yuan.
Chinese property firms listed in Hong Kong face a March 31 deadline to file annual results and an auditor resigned to delay the Evergrande’s report.
Transparency and governance concerns have grown alongside worries about Evergrande’s ability to repay debt despite a record number of defaults last year.
Investors are still looking to squeeze the company from its debts.
Who is largely affected by Evergrande in the U.S.?
BlackRock, HSBC, and UBS are the largest institutions holding Evergrande in their portfolios.
BlackRock added 31.3 million notes of Evergrande’s debt between January and August 2021 alone.
That pushed its stake to 1% of the assets in its $1.7 billion Asian High Yield Bond Fund.
HSBC increased its positions in the company by 40% through July, while UBS increased its position by 25% through May.
While these numbers don’t compare to the giant’s overall AUM of $9.46 trillion, they are still relatively large losses.
We can see how these global investments affect our stock market too.
The DOW is currently down -152% and the NASDAQ -49%.
The SPY is just keeping up despite breaking its monthly downtrend.
What are your thoughts on the scale of Evergrande’s losses?
How long do you think the developer will be leading its investors around?
Leave your thoughts below.
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