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Trading in Chinese real estate giant Evergrande shares suspended

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The heavily-indebted Chinese real estate giant Evergrande has halted trading in its shares on the Hong Kong Stock Exchange following suspected payment difficulties.

The stock exchange made the announcement without giving further reasons.

Evergrande has accumulated debts of more than $US300 billion ($413 billion), most of it among domestic investors.

The property developer’s share prices plunged by almost 90 per cent last year.

Evergrande had already missed interest payments on $US255 million of foreign bonds last Tuesday, with a market-standard grace period still pending.

However, in early December, the stumbling group also missed the 30-day grace period for the first time.

According to Chinese reports on Saturday, Evergrande was also ordered by the authorities to demolish a huge residential project with a total of 39 residential buildings on the southern Chinese island of Hainan within 10 days.

The real estate project, which is to cover a total construction area of almost 435,000 square metres, was built illegally.

Most recently, Standard & Poor’s (S&P) joined Fitch as the second international rating agency to downgrade Evergrande’s credit rating – to credit default in some areas, one notch short of complete default.

Shortly before, the Shenzhen-based property developer itself had issued a warning that in the current financial situation it could not be guaranteed to meet all outstanding obligations in a timely manner.

At the same time, other Chinese real estate companies have also run into difficulties in the wake of the Evergrande crisis.

In December, the share prices of the leading companies in the sector fell to their lowest level in five years.

The struggling Kaisa Group, for example, brought external advisers on board to rescue itself from its difficult situation.

The Sunac group has also suffered from plummeting share prices recently.

A survey by the Chinese central bank published by the state news agency Xinhua also shows that the long booming market is suffering a lasting setback.

According to the survey, almost 57 per cent of all Chinese expect property prices to remain unchanged in the first quarter of 2022, while another 15.2 per cent expect a decline.

“It’s pretty clear that 2021 has broken the confidence in ever-rising property prices,” said Michael Pettis, economist at the renowned Peking University.

-DPA

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