Evergrande-China's Lehman Moment?
A Thread🧵on the problems one of the biggest property developers in China faces!
Do "Retweet" to educate maximum investors
Lets go👇
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A Thread🧵on the problems one of the biggest property developers in China faces!
Do "Retweet" to educate maximum investors
Lets go👇
(1/7)
Who is Evergrande?
Evergrande is the largest property developer in China.
It has nearly 1,300 projects in 280 cities with 2% of the Chinese real estate market.
As per media reports over 1.5 million people are waiting for their homes to be completed by Evergrande.
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Evergrande is the largest property developer in China.
It has nearly 1,300 projects in 280 cities with 2% of the Chinese real estate market.
As per media reports over 1.5 million people are waiting for their homes to be completed by Evergrande.
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So what is the problem?
Evergrande,has liabilities exceeding $300 billion(22.5 lakh crore),is on a brink of default
Investors faced a shock when the company hinted that it may default on $80 million interest payment due on September 23
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Evergrande,has liabilities exceeding $300 billion(22.5 lakh crore),is on a brink of default
Investors faced a shock when the company hinted that it may default on $80 million interest payment due on September 23
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As a result of this Junk Bond yields are at the higher since March 2020
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Will Evergrande default?
As a systemically important developer,Evergrande bankruptcy would cause problems for the entire property sector
Debt recovery efforts by creditors would lead to fire sales of assets+hit housing prices.
Financial markets would be devastated
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As a systemically important developer,Evergrande bankruptcy would cause problems for the entire property sector
Debt recovery efforts by creditors would lead to fire sales of assets+hit housing prices.
Financial markets would be devastated
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Will the Chinese Govt rescue Evergrande?
Evergrande is far bigger than Lehman
It is impossible to know for sure what would happen if China allows Evergrande’s downward spiral to continue unabated
Pressure to intervene is growing as signs of financial contagion increase
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Evergrande is far bigger than Lehman
It is impossible to know for sure what would happen if China allows Evergrande’s downward spiral to continue unabated
Pressure to intervene is growing as signs of financial contagion increase
(6/7)
Conclusion-
🏘️Evergrande is a very big player in the Chinese housing market
🏘️Bankruptcy for Evergrande will be bigger than the Lehman crisis
🏘️Bankruptcy will have devastating consequences for the global financial markets
🏘️Intervention from the Chinese govt is a necessity
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🏘️Evergrande is a very big player in the Chinese housing market
🏘️Bankruptcy for Evergrande will be bigger than the Lehman crisis
🏘️Bankruptcy will have devastating consequences for the global financial markets
🏘️Intervention from the Chinese govt is a necessity
(7/7)
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