Just like the rest of the world, China’s economy is in danger. Because China is running out of cash, it will increase its bonds and stocks more to overcome this situation. And recently Evergrande said, Evergrande Pays Bond Coupons.
No one expected that there would be any gain in the real estate, but to everyone’s surprise, the stocks rose to about 5.7 points this Thursday. There were no high hopes as the real estate stocks had not seen any gain since the year 2015, and on Thursday, after a gap of six years, the stocks jumped.
Not just this, but the Chinese dollar also rose about two to eight cents, and after it was announced that new rules regarding the debt selling would be made, the Stock shares and the bonds rose for another day.
The lending of merges is increasing in the hopes of helping the striving developers. State banks in the last month of October allowed for the lending of money to the industry.
Evergrande had gone bankrupt and could not pay back to the bondholders. They had a thirty-day period to pay back the developer’s cash, but they could not do so. After this, a lot of other scenarios have come to light, hinting that it is not just one case, but there are many facing the same situation. Four more developers had also sold their stocks worth of billion dollars to the Chinese investors.
These investors have been announced to have gone bankrupt, so they will not be able to pay back the investors. This has created an uproar among the governments and investors, and soon there will be a call of action or filing of cases to this. Even if the cases are filed, since there is no money in the developer’s bank accounts, they will not be able to pay them back. The choice that investors are left with is to just wait and pray for their cash to be provided back.
China is facing difficult times with panic among the public because of the struggling property market of China. The wealth-management products WMPs, which got the investors blindfolded, worth almost seventy billion yuan that is about ten point nine billion US dollars are again facing the schedule revisions for the unresolved payments.
REDD has reported that the Kaisa Group Holdings Ltd. Has sent out letters and notices to the investors apologizing to them about their loss and letting them know that paying back through the coupons is no more an option. The company does not have more of the resources to fulfill the payments that are due. They also said that nothing till now had been finalized. The company has been working tirelessly to come up with a solution, so this whole situation does not guarantee that they will never be paid back; it is just for the time being. However, no accurate predictions about this matter can be made for now as there is so much uncertainty involved.
Yango Group Co. proposal to delay payments (4:09 p.m. )
Yango Group Co. is facing challenges in staying stable throughout these crises. They had already missed a deadline of paying back at the start of November. The main branch of this company has put forward an appeal for the wealth management products WMP delaying of the payments. All these things are causing distress among the people of China.
The companies are trying their best to repay everyone, and because of this, they have been collecting ideas to make a plan for the repayments. The approval of the plan and acting on the plan will take some time, at least a month, so the investors will have a month more to wait for.
A drop in the Land Sale Income (2:59 p.m. HK)
According to Moody’s investors Ltd., It is reported that the local governments in China will be under threat next year too, and they might have to move towards choosing the option of taking loans. There will be a decline in the land sale income which will be putting the economy to risk as it counts a total of one-third of the income of the government. The funding for the infrastructure building project will be held back in order to take control of the situation.
Beijing Steps to Minimize Effects from Bond Fallout (5 a.m. HK)
It all started with Evergrande moving onto the less critical developers and now to the biggest property firms of the nation. This loss of finances has resulted in a massive decline in the bond market, affecting the finances of the country badly. Because of this, now Beijing, the capital of China, is under immense pressure to limit the damage.
Top-rated companies like the China Vanke Co. are going through concerning situations as the dollar bonds are declining and also with the pressure of paying the debt that has been piled up from the past.
There may be an allowance of the issuance of domestic bonds, which could help fight the worsening of government financial conditions. There may be more steps taken to decline the liquidity crises, reported by the media on Wednesday.
There has been a notable increase reported in the bonds of property firms, but they will not be beneficial for smaller firms. Only the higher-ranked firms will be benefitted from this. There is a three-red-line limit set by the enterprise, which will be determining the lending that could be allowed. This is a healthy idea that would help with the increase of shares of the developers.
Interest Paid by Evergrande; Default Restored (4:06 a.m. HK)
Evergrande has succeeded in paying back the interest payments. This has been confirmed through the investors, especially the two who received their payments and shared them with us. Their identities can not be disclosed as they were not allowed to discuss these matters with the public.