Saturday , October 16 2021

Evergrande crisis: stock prices soared under bailout and self-rescue, but not yet out of BBC News situation



Evergrande

Image source,EPA

On the first trading day of Hong Kong shares after the Mid-Autumn Festival holidays, Evergrande’s share price rose 17.62% to 2.67 yuan at the close. Did some media start speculating whether the crisis would be resolved?

Evergrande has recently launched a series of self-rescue actions: on the one hand, it has reiterated that it “does everything possible to ensure the delivery of the property”; on the other hand, a corporate bond issued by Evergrande 23 was originally paid in September, and Evergrande claimed it had been resolved through off-market trading: it would temporarily alleviate market concerns about default on interest payments.

However, compared to the maximum of 20.2 yuan of Evergrande’s share price last year, even after a day of firing, the market value still evaporates at 86%. The Chinese government has not stated that it will intervene. The alarm of the Evergrande crisis has not been raised.

The focus of the market remains on the degree of effect of the Evergrande crisis and whether it will become China’s “Lehman moment”.


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