Business & Economy

Evergrande crisis prompts mixed reactions in Asian markets

Tokyo/Beijing, Sep 21 (EFE).- The Tokyo Stock Exchange closed 2.17% lower while Hong Kong’s index rebounded to 0.5% after an initial slump Tuesday amid jitters in the Asian market caused by the ongoing uncertainty surrounding debt-addled Chinese retail giant Evergrande.

The Shanghai and Shenzhen stock exchanges on mainland China were closed for a national holiday.

The China Evergrande Group has a debt of over $300 billion, a third of which it needs to pay off within the next 12 months, according to Chinese financial newspaper Caixin, which added that the firm is currently only capable of covering 10%.

Its situation has spread fear in the markets due to the domino effect that its potential collapse would entail internationally.

Evergrande’s shares lost a further 3.5% in value by the end of morning trading in Hong Kong Tuesday.

A looming deadline to pay $84 million in interest by Thursday could add to the company’s woes.

The group, founded in 1996, benefited from the wave of urban migration in China.

In 2009, the real estate company was listed on the Hong Kong Stock Exchange and performed well in the next decade.

Its founder, Xu Jiayin, became the richest man in China with a fortune of $42.5 billion in 2017, Forbes said.

The market value of Evergrande shares also peaked that year.

The Chinese property sector is now battling with a decline in home sales and new real estate regulations.

The group had allegedly hidden a pile of debt incurred to expand to other sectors like health, electric vehicles, and even sports.EFE


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