The Evergrande president has been trying to calm the markets. He is sure that “they will come out of their darkest moment.”
This is the development on the Asia Pacific stock exchanges at 7.30am:
- Nikkei in Tokyo falls 1.73 percent
- Hang Seng in Hong Kong is down 0.56 percent
- The FTSE Straits Times is up 0.46 percent
- The ASX 200 in Sydney is down 0.36 percent
The development comes after a sharp drop in both Europe and the US on Monday. The challenges facing Chinese real estate Evergrande, as well as the US Federal Reserve’s interest rate meeting on Wednesday.
For Evergrande, the steep decline continues. The stock fell about 5 percent on Tuesday, after falling more than 10 percent the day before.
The Evergrande crisis briefly explained
Chairman of the board: Will comply with the obligations.
In an attempt to calm the markets, Evergrande President Hui Ka Yuan wrote in a letter to employees that he is confident they will “come out of their darkest time” and deliver the housing projects as promised, local media write, according Reuters.
The chairman of the board also writes that they will fulfill the obligations they have to home buyers, investors, partners and financial institutions, according to the news agency.
The fear, however, is that the company’s debt could lead to huge losses in China’s financial sector, should it collapse, writes Reuters.
Evergrande bang of about 390 million for the Petroleum Fund
Do not believe in the help of the authorities
It has also been questioned whether the Chinese authorities in Beijing will help the company.
“We believe that Beijing will only be persuaded to intervene if there was a wide-ranging contagion effect that led to the downfall of several large builders and a systemic threat to the economy,” the research firm S&P wrote in a report, according to Bloomberg.
– The fall of Evergrande alone is unlikely to lead to such a scenario, they add.
Cliff Hodge, director of equity investments at Cornerstone, says Bloomberg that markets have some anxiety about the potential effects of Evergrand, along with nervousness ahead of the Fed’s monetary policy meeting.
– We have believed that a correction is in overtime, a decrease in the area of 5 to 10 percent will be a decrease favorable to the purchase. For now, we are not worried about a market crash. Fed and Evergrande are not new, Hodge continues.
China’s Evergrande troubles can affect you, even without a chaotic collapse
Tokyo Stock Exchange starts week down
Tuesday is the first trading day of the week on the Tokyo Stock Exchange, after the turmoil in the global stock market, it was not unexpected that events in the Japanese capital were affected.
The Japanese stock market, which closed on Monday, is expected to be dominated by sell orders as investors are affected by the global stock market turmoil linked to Evergrande, according to a note from Okasan Online Securities, according to NTB. .
The mainland Chinese and South Korean stock exchanges are closed on Tuesdays in connection with public holidays.
Big crash on Wall Street