Hengda, China's largest private real estate developer amid rumors of bankruptcy, said today (23rd) that it would pay off some of the interest on bonds worth 140 billion won, showing an urgent effort to put out the fire. However, there is still uncertainty in the market as the interest alone will exceed KRW 800 billion by the end of the year. Such rumors about Hengda's crisis seem to have an immediate impact on our stock market.

By Jang Hoon-kyung.


Chinese real estate developer Hengda Group has agreed to pay 42.5 billion won in interest on RMB bonds coming today, Reuters reported.

He did not mention about KRW 99 billion in interest on dollar-denominated bonds, but he showed his intention to manage the liquidity crisis by paying some interest.

S&P, a credit rating agency, said, "The amount of Hengda's loans is 0.3% of the total amount of bank loans in China, and the Chinese financial authorities can manage it."

Thanks to this atmosphere, the global stock market as well as the Shanghai Composite Index are showing signs of calming down.

However, as Hengda Group's total debt exceeds KRW 350 trillion, there is still a lot of anxiety.

Right now, from today to the end of the year, we have to pay 700 million dollars in interest alone, or 840 billion won in Korean money, but there are many predictions that it will be difficult to pay.

[Alex Wong / Head of Asset Management, Ampoule Capital: If the situation spreads and affects the bond and real estate markets as a whole, the problem will grow.

Like the Lehman incident, it can also affect other real estate developers.]

Many experts predict that the Hengda crisis will also affect the Korean stock market, which opens today after the Chuseok holiday is over.

Furthermore, there are concerns that if it leads to a contraction in the Chinese economy, it will become a major destabilizing factor for the Korean economy.