Chinese real estate developer Evergrande in free fall on the stock market

Chinese real estate group Evergrande is drowning in debt of 260 billion euros, the equivalent of Romania's GDP.

Ảnh Reuters ngày 09/24/2010

Text by: RFI Follow

1 min

Evergrande's share price plunged 17% on Monday, September 20 on the Hong Kong Stock Exchange and nearly 90% compared to the start of the year.

The group's difficulties are having repercussions on the entire real estate sector in China. 

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In the wake of

Evergrande

, other large real estate groups listed in Hong Kong fell on the stock market.

This is the case with Sunac, the country's fourth-largest real estate developer, and Greentown China, as the risk of Evergrande's bankruptcy is undermining investor confidence in China's real estate sector, one of the main drivers of economic growth. the country's economic growth.

Effects on the financial system

The effects are also being felt on the financial system of the Middle Empire.

Some banks and insurance companies retreated on the Hong Kong Stock Exchange, the only open one, mainland Chinese financial markets closed on Monday due to a public holiday.

Can Evergrande pay off its debt?

Investors are now waiting to see if Evergrande has the capacity to pay some of the interest on loans and bonds this week.

Weighed down by a colossal debt of nearly 260 billion euros, the group warned at the beginning of last week that it could not honor some of the obligations to its creditors.

Analysts believe that a bankruptcy of this giant could have repercussions on the entire Chinese economy.

► Also to listen: Bankruptcy of Evergrande in China: "The growth of the company was made by debt"

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