The share of the Chinese real estate company Evergrande is still in a nosedive on the Hong Kong stock exchange.
The crisis threatens to spread to other companies.
Concerned investors are waiting for announcements from Beijing.
Hong Kong / Munich - Concerns about the economic consequences of a possible collapse of the Chinese real estate giant Evergrande are growing. Because more and more companies and industries in China and Hong Kong itself are drawn into the wake of the Evergrande crisis. Real estate stock prices on the Hong Kong Stock Exchange plummeted on Monday. With a share of around a quarter of the gross domestic product, the real estate sector is a crucial branch of the economy in China. A crisis in the sector could therefore have serious consequences for the entire Chinese economy.
But it is still unclear how the Chinese government will react to the looming economic crisis.
An analyst at the Chinese Bocom International Holdings, Philip Tse, warned of "further negative consequences" if the political leadership does not send a clear signal about the situation in Evergrande
Evergrande: stock market price plummeted - also with other real estate companies
Evergrande's share price plummeted another 17 percent on Monday, meaning that the company's shares have lost around 90 percent of their value since the beginning of the year. The Evergrande crisis has already led to enormous asset losses: the Chinese real estate tycoon Zhang Yuanlin, chairman of the Sinic Holdings Group, lost more than one billion dollars on Monday, according to the US magazine "Forbes". Trading in Sinic's stock was suspended after it lost 87 percent of its value. But the prices of local Hong Kong real estate developers such as Henderson Land, New World Development or Sun Hung Kai Properties also lost more than ten percent on Monday.
According to observers, the problems have worsened for Evergrande in recent months mainly because Beijing is enforcing stricter rules for the country's highly indebted real estate sector.
This is one of the reasons why the crisis is now affecting other companies that are positioned in a similar way to the problematic company from Shenzhen.
According to a report by the Hong Kong
South China Morning Post
on Monday, the
rating agency Fitch corrected
the outlook for Guangzhou R&F to negative.
Like Evergrande, Guangzhou R&F had tried to sell its residential, hotel and logistics facilities in order to get fresh money.
Most recently, the rating agencies had repeatedly downgraded Evergrande's credit rating.
Evergrande: Investors expect default this week
Investors expect that the group will no longer be able to service the interest payments on its billions in debt this week. The debt of the company, one of the largest real estate developers in the country, is the equivalent of around 260 billion euros. Interest payments on bank loans are due today, Monday - according to
with a postponement period until Tuesday - and on two bonds next Thursday. International investors are also worried about bonds.
Over the weekend, Evergrande had already offered investors to compensate them with real estate. The offer was aimed at buyers of the company's wealth management products. Evergrande also admitted misconduct by several high-ranking managers. Six executives illegally redeemed several of the company's investment products in advance. The company announced on Saturday that the matter is being taken very seriously.
In front of the company representatives, investors and suppliers protested in several Chinese cities and asked for their money back.
A company representative had offered the angry business partners unfinished apartments, parking spaces or storage rooms instead of money.
According to experts, more than a million people have paid for construction projects in advance that Evergrande has not yet implemented.
Evergrande crisis spreads to other industries
The crisis is also noticeable in other industries - which in Hong Kong dragged the entire stock market into the basement. The insurance company Ping An recorded a minus of almost six percent. With the shares of the China Minsheng Bank, the Agricultural Bank of China and the Industrial and Commercial Bank of China, the shares of financial houses also lost between three and six percent of their value. The leading index of the Hong Kong stock exchange, the Hang Seng Index, therefore lost more than four percent on Monday.
(ck / AFP / dpa)