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.
CHIP RACE: Three years of overbroad export controls drove foreign competitors to pursue their own AI chips, and ‘cost US taxpayers billions of dollars,’ Nvidia said China has figured out the US strategy for allowing it to buy Nvidia Corp’s H200s and is rejecting the artificial intelligence (AI) chip in favor of domestically developed semiconductors, White House AI adviser David Sacks said, citing news reports. US President Donald Trump on Monday said that he would allow shipments of Nvidia’s H200 chips to China, part of an administration effort backed by Sacks to challenge Chinese tech champions such as Huawei Technologies Co (華為) by bringing US competition to their home market. On Friday, Sacks signaled that he was uncertain about whether that approach would work. “They’re rejecting our chips,” Sacks
It is challenging to build infrastructure in much of Europe. Constrained budgets and polarized politics tend to undermine long-term projects, forcing officials to react to emergencies rather than plan for the future. Not in Austria. Today, the country is to officially open its Koralmbahn tunnel, the 5.9 billion euro (US$6.9 billion) centerpiece of a groundbreaking new railway that will eventually run from Poland’s Baltic coast to the Adriatic Sea, transforming travel within Austria and positioning the Alpine nation at the forefront of logistics in Europe. “It is Austria’s biggest socio-economic experiment in over a century,” said Eric Kirschner, an economist at Graz-based Joanneum
BUBBLE? Only a handful of companies are seeing rapid revenue growth and higher valuations, and it is not enough to call the AI trend a transformation, an analyst said Artificial intelligence (AI) is entering a more challenging phase next year as companies move beyond experimentation and begin demanding clear financial returns from a technology that has delivered big gains to only a small group of early adopters, PricewaterhouseCoopers (PwC) Taiwan said yesterday. Most organizations have been able to justify AI investments through cost recovery or modest efficiency gains, but few have achieved meaningful revenue growth or long-term competitive advantage, the consultancy said in its 2026 AI Business Predictions report. This growing performance gap is forcing executives to reconsider how AI is deployed across their organizations, it said. “Many companies
France is developing domestic production of electric vehicle (EV) batteries with an eye on industrial independence, but Asian experts are proving key in launching operations. In the Verkor factory outside the northern city of Dunkirk, which was inaugurated on Thursday, foreign specialists, notably from South Korea and Malaysia, are training the local staff. Verkor is the third battery gigafactory to open in northern France in a region that has become known as “Battery Valley.” At the Automotive Energy Supply Corp (AESC) factory near the city of Douai, where production has been under way for several months, Chinese engineers and technicians supervise French recruits. “They
RSS