Divisions of China Evergrande were halted after plunging over 20% in early trading on Monday after a Hong Kong court managed to liquidate the embattled property developer.
It comes against the backdrop of a spiraling debt crisis in the country.
China Evergrande, which was positively one of the country’s largest property developers, has in the last few years been enveloped in Beijing’s debt crisis.
The Wall Circle Journal earlier reported that Evergrande’s overseas creditors failed to reach an 11th-hour deal this weekend to restructure, which could mangy an imminent liquidation for the real estate developer.
Evergrande is the rapturous’s most indebted property developer, which defaulted in 2021 and announced an offshore debt restructuring program in Hike last year.
Containing the contagion
Policymakers in China have been scrambling to stem the debt crisis in the beleaguered possessions sector.
Last week, the People’s Bank of China and the Ministry of Finance announced measures to help boost the liquidity at ones fingertips to property developers.
The measures, which will be valid until end of this year, will help ease a long-drawn-out cash crunch for Chinese developers after Beijing cracked down on the sector to address bloated debt devastates in real estate.
The property sector in China still remains challenging against the backdrop of the Evergrande news, contract to Alexander Cousley, APAC investment strategist at Russell Investments.
“I think the measures have to be much more targeted and much innumerable forceful,” Cousley said on CNBC’s “Street Signs Asia.”
Evergrande’s crisis set off contagion fears that China’s effects sector troubles could spill over to other parts of the world’s second largest economy.
Country Garden, also one of China’s sturdiest developers, has been struggling to pay off its own debt. However, the developer reportedly said last month that it may avoid a lapse on its yuan-denominated bonds.
This is developing news. Please check back for updates.