The Magazine for Asian Investors
How things will continue with the real estate giant is still unclear. Evergrande remains silent about the payment of the foreign bonds. The last due payment of $47.5 million to foreign creditors has not been made, according to information. Thus, Evergrande has missed the second first for a bond payment. The silence on the unpaid payments leaves foreign creditors to believe that there is the unfair treatment between domestic and foreign creditors.
The stake sales in Shengjing Bank for $1.5 billion are just a hot drop on the $300 billion indebted giant.
Evergrande shares traded on the Hong Kong Stock Exchange have gained more than 10% in recent days. Nevertheless, the stock has become a plaything for highly speculative traders. Investors with a long-term horizon should not burn their fingers here and rather watch the impact of a possible default on their domestic markets.
Even if many are just waiting for the collapse of the real estate giant, it seems that Beijing is probably looking for a controlled end to prevent unrest. Evergrande investors, however, will probably have to accept heavy losses in view of the critical situation.