This situation puts investors at risk of large losses at the end of the 30-day grace periods, as the developer accumulated more than $ 300,000 in liabilities. According to Refinitiv, a total of $ 93.3 billion in bonds issued by Chinese developers will mature next year. “We see more defaults in the future if the liquidity problem does not improve noticeably,” CGS-CIMB said, adding that developers with a weaker credit rating are having a difficult time refinancing.
Trading in high-yield bonds remained weak after a slide on fears of quick contagion in this $ 5 trillion sector that accounts for a quarter of the Chinese economy. Data from the Shanghai Stock Exchange showed that five of the biggest losers among publicly traded bonds in morning trading were all issued by real estate companies. Promoters Modern Land and Sinic Holdings were the last to delay their deadlines, after Evergrande and Fantasia defaulted on their payments.
Although global attention has focused on defaulting on dollar debt by Chinese real estate issuers, market indicators suggest that concern about contagion and the slowdown in the economy is spreading further.
The markets They begin to increase their fear for other real estate companies. European stocks lost ground on Tuesday as investors fear rising commodity prices will hamper corporate earnings recovery, and new signs of trouble at Chinese property developer Evergrande also hit sentiment.
Mining, banking and chemical companies, all sensitive to the economy, were down more than 1%, leading the morning’s declines, despite the rebound in oil and other commodity prices losing some steam. .
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