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Evergrande

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simoan
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Evergrande

#443241

Postby simoan » September 18th, 2021, 9:43 am

Surprised no-one has mentioned the financial problems at Evergrande in China. I only became aware of them earlier in the week. It seems it has already started to feed through to the falling Iron Ore price, hence the weakness in the FTSE 100 miners, and companies exposed to the Chinese consumer e.g. Burberry, towards the end of the week.

https://www.theguardian.com/world/2021/ ... es-economy

I think comparisons with Lehmann Bros. is maybe over the top although I was surprised to learn the housing market accounted for 25% of Chinese GDP, and Evergrande on its own 2%. This could really kick off next week when Evergrande is expected to default on the payment of interest on two bonds. Who knows what wider repercussions this will have but if the markets are looking for a reason to sell off this autumn they need look no further than the Chinese property market.

All the best, Si

odysseus2000
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Re: Evergrande

#443341

Postby odysseus2000 » September 18th, 2021, 4:48 pm


GoSeigen
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Re: Evergrande

#443376

Postby GoSeigen » September 18th, 2021, 6:36 pm

simoan wrote:Surprised no-one has mentioned the financial problems at Evergrande in China. I only became aware of them earlier in the week. It seems it has already started to feed through to the falling Iron Ore price, hence the weakness in the FTSE 100 miners, and companies exposed to the Chinese consumer e.g. Burberry, towards the end of the week.

https://www.theguardian.com/world/2021/ ... es-economy

I think comparisons with Lehmann Bros. is maybe over the top although I was surprised to learn the housing market accounted for 25% of Chinese GDP, and Evergrande on its own 2%. This could really kick off next week when Evergrande is expected to default on the payment of interest on two bonds. Who knows what wider repercussions this will have but if the markets are looking for a reason to sell off this autumn they need look no further than the Chinese property market.

All the best, Si


Storm in a teacup IMO. It's a small company compared to the big four US investment banks and even the big four UK banks which were all under threat in 2008/9. Shouldn't even be mentioned in the same breath as Lehman Bros. The fact people are saying this might be seen as a contrarian buy signal.

GS

TheMotorcycleBoy
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Re: Evergrande

#443483

Postby TheMotorcycleBoy » September 19th, 2021, 8:36 am

GoSeigen wrote:
simoan wrote:Surprised no-one has mentioned the financial problems at Evergrande in China. I only became aware of them earlier in the week. It seems it has already started to feed through to the falling Iron Ore price, hence the weakness in the FTSE 100 miners, and companies exposed to the Chinese consumer e.g. Burberry, towards the end of the week.

https://www.theguardian.com/world/2021/ ... es-economy

I think comparisons with Lehmann Bros. is maybe over the top although I was surprised to learn the housing market accounted for 25% of Chinese GDP, and Evergrande on its own 2%. This could really kick off next week when Evergrande is expected to default on the payment of interest on two bonds. Who knows what wider repercussions this will have but if the markets are looking for a reason to sell off this autumn they need look no further than the Chinese property market.

All the best, Si


Storm in a teacup IMO. It's a small company compared to the big four US investment banks and even the big four UK banks which were all under threat in 2008/9. Shouldn't even be mentioned in the same breath as Lehman Bros. The fact people are saying this might be seen as a contrarian buy signal.

GS

A buy signal is great news. What I've been waiting for. Lol. However Odys linked article states/confirms the following:

But the group's struggles are also emblematic of underlying risks in China.

"The story of Evergrande is the story of the deep [and] structural challenges to China's economy related to debt," said Bekink.

so I wouldn't want to attempt to predict how long it takes to play out, and how much negative sentiment will augment that of approaching US debt ceiling arguments, and fear of the delta variant.

Matt

GoSeigen
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Re: Evergrande

#443760

Postby GoSeigen » September 20th, 2021, 9:27 am

TheMotorcycleBoy wrote:"The story of Evergrande is the story of the deep [and] structural challenges to China's economy related to debt," said Bekink.
[/i]
so I wouldn't want to attempt to predict how long it takes to play out, and how much negative sentiment will augment that of approaching US debt ceiling arguments, and fear of the delta variant.


If it has a long way to play out then it's clearly not a Lehmans moment is it? Lehmans was the final washout moment of a long unfolding disaster: the government-led bank rescue was barely a month after the failure of Lehmans. Are people thinking that banks all round the world are going to be bailed out by governments within the next four weeks?? It's a trite metaphore.

I believe Chinese stocks are closer to their low than their top, even if it turns out to be a short-term bottom. My quip about a buying signal was in relation to Chinese stocks only, not anything else just to be clear...


GS

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Re: Evergrande

#451911

Postby richfool » October 21st, 2021, 10:09 am

An interesting summary of the Evergrande situation with video:
Evergrande shares fell as much as 14% on Thursday in Hong Kong as they resumed trading after a 17-day halt.

The hugely indebted Chinese property giant had stopped its shares from trading ahead of an announcement.

Reports said real estate firm Hopson Development was set to buy a 51% stake in its property services unit.

On Wednesday, Evergrande said the $2.6bn (£1.88bn) deal had fallen through as they were unable to agree on the deals terms.

The crisis at Evergrande has triggered fears that its potential collapse could send shockwaves through global markets.

Investors have concerns about its more than $300bn of debt. The company's total liabilities are equal to around 2% of China's gross domestic product.

https://www.bbc.co.uk/news/business-58976991


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