Shares in crisis-hit Chinese property giant Evergrande have been suspended in Hong Kong amid reports its chairman has been placed under police surveillance.
It follows reports earlier this week that other current and former executives had also been detained.
Thursday’s market statement did not give a reason for the trading halt.
But it marks another low for the heavily indebted property giant which defaulted in 2021, triggering China’s current real estate market crisis.
In August, the firm filed for bankruptcy in New York, in a bid to protect its US assets as it worked on a multi-billion dollar deal with creditors.
This is the best summary I could come up with:
Shares in crisis-hit Chinese property giant Evergrande have been suspended in Hong Kong amid reports its chairman has been placed under police surveillance.
When the firm defaulted on its huge debts in 2021, it sent shockwaves through global financial markets as the property sector contributes to roughly a quarter of China’s economy.
A credit crunch would be very bad news for the world’s second largest economy, because companies that can’t borrow find it difficult to grow, and in some cases are unable to continue operating.
Then on Wednesday, Bloomberg News reported the firm’s founder Hui Ka Yan, who is also known as Xu Jiayin, had been taken away by police this month and was being monitored at a designated location.
“China’s property-sector stress will continue to pose cross-sector credit risks in the near term,” wrote Lan Wang and Duncan Innes-Ker of Fitch Ratings.
“The government’s modest policy easing to date is unlikely to drive a sharp turnaround in homebuyers’ sentiment, even though it has led to some recent improvements in broader economic indicators,” their report said.
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