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The Evergrande threat hits China and Hong Kong assets

Changes in Chinese corporations

Shares in China and Hong Kong’s economy have declined sharply over the past decade as the growing economic crisis for Evergrande developers is showing signs of spread beyond the region.

Evergrande, the world’s largest debtor, is facing more than $ 300bn in debt and other businesses as well as the deadline for foreign interest payments on Thursday.

Shares listed by the company in Hong Kong fell to 18.9% on Monday. The dot was sealed concerns about overall health China’s real estate segments have launched a massive sell-off, sending the Hang Seng Property index, which follows a record twelve, about 7%, down from 2016.

The number of Hang Sengs in Hong Kong fell by 3.7%, down from about 12% a year.

Evergrande, whose share has been low since he warned about constant risk last month, he said senior management would suffer “severe punishment”After receiving the first interest on his business he later told the stockbrokers that he would not repay on time.

The sale in Hong Kong showed that fears of growing economic sector were attracting other manufacturers and financial institutions. Real estate companies, which account for more than a quarter of China’s economic growth, have been forced to fend for themselves debt reduction.

“Evergrande is just the tip of the iceberg,” said Louis Tse, senior manager at Wealthy Securities, a corporate retailer in Hong Kong. Chinese developers are under increasing pressure to pay off their debts on the financial system, he said, as markets fear that Beijing will force real estate agents to reduce house prices in China and Hong Kong.

“This also applies to banks – if you have low housing prices what happens to repaying their loans?” That said. “It’s very touching.”

Shares in Ping An, China’s largest insurance company, fell nearly 8.4% on Monday, after which closing 5 percent On Friday when he was forced to reveal that he had not received any loans from Evergrande. Ping An has Rmb63.1bn ($ 9.8bn) visible on real estate shares across the country for Rmb3.8tn of its insurance premiums.

The insurance agent took over $ 3.2bn hit in the first half of the year the infidelity of China Fortune Land Development, a developer based in commercial parks north of Hebei.

Other Chinese producers including the Fantasia Group, which was downloaded last week by Fitch, a consulting firm and Guangzhou R&F, have also been under pressure in recent weeks. On Friday, Reuters reported that Beijing had told wealthy Hong Kong people at the closing meetings to take action to reduce housing shortages in the city.

Signs of a decline in China have also affected steel prices, which were achieved this year but fell last week after markets swept the country. metal production barriers.

On Monday, the iron future in Singapore fell by 11.5% to $ 100 per ton for the first time in more than a year. Iron prices had fallen 20% last week, theirs the worst every week since the 2008 financial crisis.

China’s foreign exchange market closed on public holidays, but the future of FTSE China A50 sold in Singapore fell by almost 4.3%.

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