2023-09-28 10:54:20
Problems are piling up for Evergrande. The Chinese real estate giant has suspended the trading of its shares on the Hong Kong Stock Exchange again this Thursday. This freeze has come after the Bloomberg agency published that his president, Hui Ka-yan, is under police surveillance at his home.
The real estate developer has reported that trading in its securities has been suspended at 9 a.m. (local time). The company’s shares plunged more than 18% on both Tuesday and Wednesday. The company had returned to trading a month ago after having been suspended from trading for more than a year.
Despite the existing problems in the Chinese real estate sector, experts believe that the risk of contagion to the banking sector is low. “Loans to promoters only represent a small percentage of bank loans in the system as a whole. Historically, developers have primarily resorted to pre-sale payments instead of credits to finance themselves. Loans to developers represent between 3% and 4% of the banking system’s loans, according to our estimates,” explained the Asian fixed income investment management team at Fidelity International in a recent article published in Finect.
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