Though policymakers tried to control the crisis but China’s financial markets going in more downward direction as Hong Kong court on Monday has ordered the liquidation of Evergrande group of China.
Trading in China Evergrande New Energy Vehicle Group, and Evergrande Property Services were halted.The benchmark Hang Seng Index was up 1.2 percent.
When it all started in Hong Kong court…..
Petition of liquidation was first filed by Top Shine , an investor in Evergrande unit Fangchebao in June 2022 , which said developer has failed to meet an agreement to reacquire the shares it had bought in the subsidiary.
“I think the bigger surprise here is that it took so long for Evergrande to be liquidated. Clearing out the deadwood should be seen as a positive, but I doubt it will boost confidence in the property sector on this news alone.” , Matt Simpson said who is Senior Market Analyst, City Index, Brisbane.
Chief Asian FX Strategist Ken Cheung from Miuho, Hong Kong said , “The markets are still focused on the property sector downturn in China, so I think they will evaluate if this liquidation or the events (will) pose any impact on the progress to fix the property sector in China, and how the Chinese government will make any arrangement due to this kind of court case impact.”
Notably , Evergrande had been working on a $23 billion debt revamp plan for two years and Its original plan was ruined in as its billionaire founder Hui Ka Yan was under investigation for suspected crimes in late September.
Another Group namely Adhoc bondholder group was also in support with the developer oppsoing the liquidation petition until the last hearing , early in the December previous year.
Evergrande became a figure of the debt crisis that has flooded China’s property sector. The world’s most indebted developer has around $300 billion of liabilities and $240 billion of assets.
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