Global financial crash: China Evergrande’s share price drops again as meltdown looms
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Amid its $305billion (£221billion) debt, the company has fallen yet again on the Hong Kong stock exchange. As of current trading, the property group has fallen by 1.08 percent today. That takes its value to 2.75 Hong Kong dollars and had been 2.78 last Friday.
As the company struggles to pay bond interest payments, Evergrande has fallen by 77.96 percent in the last six months.
With the company’s share price plummeting, the stock index reported Evergrande will be removed from the Hang Seng China Enterprises Index.
The index includes the top 50 eligible stocks by a measure of their value in China and Hong Kong.
In order to try and repay its vast debt, Evergrande has sold its stake in streaming company, Hang Ten.
However, this is only expected to raise £200million in sales from what is labelled as the Chinese version of Netflix.
Other assets such as its headquarters in Hong Kong have also been put up for sale.
As it stands, there have been reports the company has missed five deadlines for bond interest repayments.
According to Deutsche Marktscreening Agentur claimed those deadlines amount to $148million (£110million) in debt to foreign investors.
JUST IN: Evergrande to be removed from stock index as meltdown looms
Further deadlines lead into next year with a $117.5million (£87million) sum on January 22, 2022.
The property market is essential for China’s GDP and is valued at $55trillion (£40trillion) – four times larger than the country’s GDP.
When including construction and property-related goods and services, the annual housing activity accounts for 29 percent of the country’s GDP.
In order to try and fine-tune the property market, Xi Jinping has attempted to bring the market under more control with restrictions on foreign loans.
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Speaking to Express.co.uk, professor Steve Tsang director of the School of Oriental and African Studies’ China Insititute said: “The individual companies don’t matter very much.
“They are unlikely to be bailed out.
“The property market matters, and if it triggers the collapse of the market, that is a very big deal.
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“The CCP is banking on that it won’t do so.
“If they can’t finesse the property market, it will continue unabated and bubbles eventually burst.
“That will cause major economic problems which will may not be contained in China.”
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