The chairman of indebted Chinese housing giant Evergrande Group (恆大集團) has told staff that he believes the group will “step out of the darkest moment soon,” state media reported yesterday as Asian stock markets panic over fears the conglomerate will default.
The embattled developer has been struggling to appease angry home buyers and investors as it sways on the brink of collapse with debts exceeding US$300 billion.
Xu Jiayin (許家印), who founded the company in 1996, told staff in a letter to mark the Mid-Autumn Festival that he “firmly believes Evergrande will be able to step out of the darkest moment soon,” the state-run Securities Times reported.
He went on to say Evergrande would increase the full resumption of work and production, ensure the delivery of buildings, and “hand over a responsible answer to home buyers, investors, partners and financial institutions.”
He also thanked staff for their hard work in the letter, as China celebrates a two-day public holiday.
The crisis at one of China’s biggest developers added to an already downbeat mood on trading floors, where dealers were also juggling an expected tightening of monetary policy by the US Federal Reserve, rising COVID-19 infections and a slowing global recovery.
Hong Kong-listed real-estate firms — which took the brunt of the selling on Monday, tanking more than 10 percent — managed to squeeze out gains in the morning as bargain buyers moved in.
However, there remains a lot of uncertainty.
Attention is on what happens next in the Evergrande saga, with the firm — wallowing in debts of more than US$300 billion — due to pay interest to bondholders on two notes tomorrow.
Most experts expect the firm to default on the payments, although it does have a 30-day grace period afterward.
Still, analysts said the nervousness on markets comes from a lack of clarity from leaders in China.
“Even though most people don’t expect Evergrande to collapse all of a sudden, the silence and a lack of major actions from policymakers is making everyone panic,” said Ding Shuang (丁爽), chief China economist at Standard Chartered PLC in Hong Kong. “I expect China to at least offer some verbal support soon to stabilize sentiment.”
Hong Kong’s Hang Seng Index, which plunged more than 3 percent on Monday, added 0.5 percent yesterday.
Markets in Taipei and Shanghai were closed for the festival.
Sydney, Singapore, Manila, Mumbai and Bangkok also rose, although Jakarta dipped and Wellington was barely moved.
London, Paris and Frankfurt rose more than 1 percent in early exchanges.
However, Tokyo’s Nikkei 225 lost more than 2 percent as traders returning from a long weekend played catch-up with Monday’s global sell-off.
Ratings agency S&P said in a report this week that Chinese officials would not likely step in unless they thought the Evergrande crisis could cause widespread risks, although analysts played down any concerns that it could play out like the collapse of Wall Street titan Lehman Brothers Holdings Inc in 2008 during the global financial crisis.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day