Evergrande stock: China’s property developer suspends trading in Hong Kong
Evergrande said in a filing to the Hong Kong Stock Exchange that its trading halt was pending an “announcement containing inside information,” though it did not elaborate.
The company has about $300 billion in total liabilities, and analysts have worried for months about whether a collapse could trigger a wider crisis in China’s property market, hurting homeowners and the broader financial system. The US Federal Reserve warned last year that trouble in Chinese real estate could damage the global economy.
The company’s stock was rattled last week after more debt payment deadlines passed without signs that it had met its obligations, though it reportedly has a 30-day grace period to pay those debts. (Fitch’s downgrade came when Evergrande appeared to miss payments after their grace periods lapsed.)
Evergrande did not respond to a request for comment about its decision to halt shares Monday.
The company has had some other setbacks recently, too. Local media recently reported that authorities in Hainan province — a tropical resort island off the coast of southern China — ordered Evergrande to demolish 39 buildings. The company acknowledged the order in a post on WeChat, noting that it did not affect the plots and buildings of some 61,000 property owners. It added that it would “actively communicate and handle properly in accordance with the guidance of the decision letter.”
And, there are signs that Chinese authorities are taking steps to contain fallout from the company’s downward spiral and guide it through a restructuring of its debt and business operations.
The People’s Bank of China also said it would pump $188 billion into the economy, apparently to counter the real estate slump, which accounts for nearly a third of China’s GDP.
— Laura He contributed to this report.