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The liquidity crisis at Evergrande, China’s second-largest real estate developer, is putting pressure on the mood of today’s market. Soaring energy prices are also raising investor concerns.
With total debt of over $ 300 billion, Evergrande is rushing to raise money, traversing between troublesome meltdowns with widespread consequences, controlled collapses, or government bailouts.
And today, Evergrande’s onshore unit has stopped trading all bonds after being designated as the country’s most risky issuer by a domestic downgrade.
Concerns over Evergrande’s ability to repay investors have increased in recent weeks, causing protests and anxiety about the effects of the collapse.
Yesterday, Chinese officials told major Evergrande lenders not to expect interest payments on bank loans next week, bringing underfunded developers one step closer to one of the country’s largest debt restructurings.
And today, Evergrande’s main unit, Hengda Real Estate Group Co Ltd, has applied to suspend trading of onshore corporate bonds following a credit rating downgrade from a rating agency. China Chen Singh International (CCXI)) When S & P -And increasingly volatile transactions.
The suspension of Hendga’s land corporate bonds, according to market participants, indicates that defaults and restructuring are more likely.
Bond traders who refused to identify said that changes in the trading mechanism were likely aimed at limiting participation and curbing volatility.
“Many companies will adjust their bond trading mechanisms prior to default,” he said.
The crisis is knocking on the share of the entire real estate sector at a time when China’s housing sector already appears to be slowing.
Chinese CSI300 Today’s stock index fell by almost 1%, Jeffrey Halley, Senior Market Analyst, Asia Pacific, OANDNS Evergrande reports that it “emphasizes emotions.”
The story of Evergrande, with $ 300 billion in debt, is nearing its end, and Everteflon is running out of non-sticky material. While all debt / stock swap mothers can be seen being “encouraged” by the government, in the meantime, the above toxic cocktail combinations weigh on Chinese stocks.
As I said before, buying dips is now a dangerous business in China.
Purchasing energy is also becoming a daunting task, and wholesale prices for gas and electricity have recently skyrocketed to record levels.
One of the UK’s most important power cables has shut down. France After the fire joined the UK supply crisis and hit record high market prices.
These record prices will drive up energy costs for businesses and undermine profitability. In addition, a corresponding surge in billing will hurt consumers next year.
More seriously, these record prices forced some factories to shut down. This suggests that the energy crisis could hurt economic growth.
British steel Gareth Stace, director general, says some steel mills have already been forced to suspend operations.
“These exorbitant prices have forced some UK steelmakers to shut down during periods when energy costs are estimated to be in the thousands per megawatt hour. Was about £ 50 per megawatt hour.
While the global steel market is booming, these spectacular prices make it impossible to produce steel in a profitable way at any given time of the day or night.
Jim reid, A Deutsche Bank strategist told clients this morning:
three [are] Concerns have been raised in the UK as a fire knocked out a cable that powers France, with it expected to be fully operational by at least October 13th, perhaps 2022.
Partly due to a tight supply that is not as replenished as expected after a cold winter, but with an increasing number of plants, a shortage of coal options, Russia supplies Europe with less than expected I am sending.
Investors are also looking at the latest US retail sales, which shows whether the Delta variant hit US consumer spending last month.
The European stock market FTSE 100 called 0.2%.
- 7:00 am BST: New Eurozone car registration in August
- 9:30 am BST: ONS Real-Time UK Economic Indicators
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- 1.30pm BST: US Weekly Unemployment Rate
- 1.30pm BST: US retail sales in August
Evergrande Crisis and Record Energy Prices Squeeze Markets – Business Live | Work
Source link Evergrande Crisis and Record Energy Prices Squeeze Markets – Business Live | Work