Home Business Evergrande debt crisis led to turbulent A-shares, three major indexes plunged in the afternoon | Xu Jiayin | Bonds

Evergrande debt crisis led to turbulent A-shares, three major indexes plunged in the afternoon | Xu Jiayin | Bonds

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[Epoch Times September 15, 2021](Epoch Times reporter Li Jing comprehensive report) The debt crisis of China’s leading real estate developer Evergrande Group continues to ferment. On September 14th, Evergrande Group was hit by stock and debt double kills: Evergrande’s bonds fell across the board, less than 30% of the issue price, and Evergrande’s stocks were not optimistic. In the afternoon, the A-share market suddenly plunged, with the real estate index plummeting nearly 4%. Analysis believes that the market turmoil is related to the Evergrande incident.

In the afternoon of the 14th, the A-share Shanghai Index and the Shenzhen Component Index both fell, the Shanghai Index fell 3,700 points, and more than 3,200 stocks in the Shanghai and Shenzhen stock markets fell. On the disk, the financial, real estate, steel, coal, and gold sectors led the decline. Among them, the real estate index fell nearly 4%.

As of the close, the Shanghai Composite Index reported 3,662.6 points, down 1.42%; Shenzhen Component Index reported 14,626.08 points, down 0.54%; CSI 300 reported 4,917.16 points, down 1.49%; Kechuang 50 reported 1,396.67 points, up 0.88%.

It is worth noting that the recent treasury bond futures continued to weaken and closed again on the 14th. Most treasury bond futures closed down slightly. The 10-year main contract fell 0.06% and the 5-year main contract fell 0.02%. The corporate bond index has even seen successive declines in the market.

According to a report by “Brokers China”, in addition to structural adjustments in the market today, the crash in finance and real estate was largely related to the Evergrande Group incident. In the past two days, the Evergrande incident has continued to ferment due to the issue of the payment of Evergrande’s wealth.

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On the morning of September 14, China Evergrande issued an announcement that it is expected that the sales of property contracts in September will continue to decline, resulting in the continued deterioration of the company’s sales collection, which will further put huge pressure on cash flow and liquidity.

On the same day, Evergrande’s bonds closed down across the board.

From the closing point of view, the “15 Evergrande 03” with an issue price of 100 yuan (RMB) reported 29.99 yuan, a decline of 6.43%; “19 Evergrande 01” reported 28.1 yuan, a decline of 24.05%; “20 Evergrande 01” reported 29.999 yuan, a decrease of 11.82%; “20 Evergrande 02” reported 28 yuan, a decrease of 6.67%.

Judging from the close of Evergrande stocks today, it is not optimistic. Evergrande Group reported HK$2.97, a decrease of 11.87%, with a total market value of HK$39.3 billion; Evergrande Motor reported HK$3.88/share, a decrease of 24.66%, and a total market value of HK$37.9 billion; Evergrande Property reported HK$4.03/share, a decrease of 12.01%, total The market value is 43.5 billion Hong Kong dollars.

According to a report on the 14th in China Fund News, the three stocks of Evergrande have lost more than 1 trillion Hong Kong dollars from their peaks to the present.

At present, Evergrande Group said it is actively approaching a number of potential investors, discussing the sale of certain shares of Evergrande Automobile and Evergrande Property, and also considering introducing new investors for Evergrande Group and other subsidiaries. However, as of now, the company has not signed any legally binding agreement with investors, and it is still uncertain whether the above-mentioned sale can be realized.

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Recently, news about the bankruptcy and reorganization of China Evergrande Group was posted on the Internet. On September 13, the Evergrande Group website issued a “rumor-defying” statement.

On September 10, the “Hengda Wealth” wealth management product under the Evergrande Group was exposed to thunderous news. Investors from the Shenzhen headquarters of Evergrande Group, as well as companies in Shanghai, Chengdu, Jiangxi, and Shaanxi, went to defend their rights. They raised banners and shouted “Repay Evergrande”. The rights defenders in many places were cleared and many people were arrested. The “Hengda Fortune” lightning incident is still in the process of fermentation. According to investor disclosures, many of the investors are incumbent and former employees of Evergrande.

Evergrande Group announced at the beginning of this month that its total liabilities rose to RMB 1.97 trillion, close to a record high. International rating agencies Moody’s, Fitch, and the international giant Goldman Sachs have successively downgraded Evergrande’s rating.

At present, the debt and equity of Evergrande Group continue to be sold off. Analysts believe that on September 14, the bank was obviously affected by Evergrande Real Estate. If the Evergrande incident continues to ferment, it may cause local risks. In addition, a large real estate company in Shenzhen is also facing a similar dilemma. Concerns caused by large real estate companies are spreading in the market. From a structural point of view, it may first affect the financial and real estate sectors, and then it may also affect the demand for steel and building materials, which in turn will have a negative impact on related sectors.

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Editor in charge: Li Qiong #

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