Another real estate company from China has run into problems.
(Photo: dpa)
Hong Kong In China, another real estate developer has defaulted on payments. The smaller rival of the struggling real estate giant China Evergrande, Modern Land, did not pay interest on a bond and justified this with unexpected liquidity bottlenecks. Investors were worried about a crisis across the entire Chinese real estate market. The industry index CSI 300 Real Estate fell 2.6 percent, the real estate index in Hong Kong five percent.
“The question is always who is next,” said an investor with exposure to the Chinese high-yield bond market. Real estate companies now got into trouble “one at a time”. Evergrande’s payment crisis has been causing unrest in the financial markets for weeks.
The group, which groans under a mountain of debt of more than 300 billion dollars, was unable to service loan interest on several occasions. Last week, however, Evergrande paid interest on a dollar bond, thereby providing relief. Evergrande also resumed work on construction projects.
Modern Land’s announcement took the wind out of the sails for investors. Evergrande stocks lost initial gains and slipped six percent. Modern Land titles were not traded.
Top jobs of the day
Find the best jobs now and
be notified by email.
More: Evergrande starts work on more than ten construction projects.