After China’s real estate giant Evergrande Group was declared in default last month, the troubles for the indebted company are far from over.
Starting out 2022, Evergrande announced on Monday that it had suspended trade in its shares in Hong Kong as investors await news on its restructuring plan.
Late on Monday, Evergrande confirmed that it had received an order from authorities in Danzhou city, Hainan province on 30 December telling it to demolish 39 buildings that were under construction at its Ocean Flower Island project.
In lieu of the above piece of news, Evergrande shares rebounded on Tuesday, as trading resumed.
China Evergrande is scheduled to hold a meeting with bondholders on January 7-10, Reuters reported, citing the company’s filing.
This comes after protesters gathered outside Evergrande offices in Guangzhou on Tuesday, demanding the indebted real estate developer to return their money, as the company’s property sales across China fell 39% last year compared with the previous year.
Meanwhile, “China Huarong Asset Management Co. is set to resume trading Wednesday following a $6.6 billion bailout, a type of state-orchestrated rescue that appears unlikely for embattled developer China Evergrande Group,” Bloomberg reports.
Market reaction
Evergrande news adds to the market’s pessimism amid growing Omicron covid variant cases. The S&P 500 futures are down 0.24% so far while AUD/USD is treading water around 0.7240 ahead of the US ADP and Fed minutes.
