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China’s Evergrande ordered to liquidate: A Hong Kong court ordered the liquidation of China’s second largest property developer China Evergrande Group, with more than USD 300 bn in liabilities, after the group failed to restructure following offshore debt defaults and more than two years in court. (Reuters | Bloomberg | FT)
It remains unclear what will happen next: The legal reach of Hong Kong’s ruling will be tested as most of Evergrande’s assets lie in mainland China, making them harder for liquidators to seize. “The liquidators will have very limited powers of enforcement over onshore assets in mainland China if they cannot get such recognition,” global law firm Ashurst’s Lance Jiang told Bloomberg.
China’s property market is in pretty rough shape after the country’s largest real estate developer Country Garden defaulted on a USD 15.4 mn bond payment in October.
Market reax: The Hong Kong Exchange halted trading in shares of Evergrande and its subsidiaries China Evergrande New Energy Vehicle Group and Evergrande Property Services.
Dive deeper: Bloomberg is out with a piece looking into the company’s history and China’s struggling property sector.
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TASI |
12,252.81 |
-0.1% (YTD: +2.4%) |
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MSCI Tadawul 30 |
1,596.25 |
-0.1% (YTD: +2.9%) |
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USD : SAR (SAMA) |
3.75 Sell |
3.75 Buy |
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Interest rates |
6% repo |
5.5% reverse repo |
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EGX30 |
29,227.79 |
+2.1% (YTD: +17.4%) |
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ADX |
9,550.74 |
-0.2% (YTD: -0.3%) |
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DFM |
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S&P 500 |
4,927.93 |
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FTSE 100 |
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Euro Stoxx 50 |
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Brent crude |
82.41 |
-1.4% |
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Natural gas (Nymex) |
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Gold |
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BTC |
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CLOSING BELL-
The TASI fell 0.1% yesterday on turnover of SAR 8.3 bn. The index is up 2.4% YTD.
In the green: AlJazira Reit (+9.9%), AlBaha (+7.1%) and Saudi Electricity (+6.5%).
In the red: Spimaco (-3.8%), Liva (-3.6%) and Ataa (-3.5%).
OPENING BELL-
Asian markets are largely in the green this morning in early trading, but shares in Hong Kong slid 2.5% at the opening bell as investors digested the liquidation of Evergrande, changes to make it more difficult to short some stocks, and the failure of Beijing to deliver a bailout package some had expected last week.
Looking to Europe: You can expect major indexes to open in the green, but the picture is mixed in New York. Futures suggest the S&P will come under pressure at the opening bell after hitting another record high, while the Nasdaq will be in the green.
CORPORATE ACTIONS-
Ataa Educational’s shares went ex-dividend yesterday for the fiscal year that ended in July 2023, Argaam reported yesterday. Education services provider approved earlier this month a dividend of SAR 1.1 per share for the year.
