I think a lot of money that has gone global and might have been tempted to go to China may very well come to the U.S.," he said.
"There are lots of global investors that want to be invested in areas where they feel comfortable, where there's corporate governance rules, where there's contract laws that are obeyed. That increased scrutiny has taken their markets and U.S.-listed Chinese stocks lower.Ĭontinued uncertainty in China could be a benefit for U.S. I would not be buying on the dips in China."īeijing has tightened regulations on industries such as technology and private education in recent months. And so I think it's a good opportunity here just to lie low. "The Chinese Communist Party which runs the government over there has been meddling, intervening in the markets, interrupting corporate governance, telling companies how they should manage their businesses. "If you're invested in Chinese stocks, there have been lots of reasons to get out, quite honestly," said Yardeni. In 2020, the Sichuan developer recorded more than 100 billion yuan in sales and was named one of the listed developers with the best investment value by China Enterprise Evaluation Association and. He says Evergrande is just one reason for investors to avoid the region. I don't think they're going to save management… but it will be restructured and in a way that won't harm the economy too much over there and won't affect the global economy or financial markets the way Lehman did," said Yardeni.Įven if a crisis tied to Evergrande is avoided, Yardeni does not see Chinese markets rebounding anytime soon. More Chinese Developers Are Scrambling to Dodge Debt Defaults, Bloomberg. "The reality is it is too big to fail, and I think the Chinese government is going to intervene big time. (2021), Chinese property developer Fantasia fails to repay. Chinese developer Kaisa talks with bondholders as default threat looms By Reuters Published 6:29 AM EST, Fri DecemLink Copied The stakes are too high to let Evergrande fail. Like with hedge fund Long-Term Capital Management, Yardeni sees government intervention in Evergrande preventing any collapse and contagion. "If it's similar to anything, it's similar to Long-Term Capital Management, which is the calamity that occurred in 1998 but that was dealt with very quickly by the Federal Reserve and the major banks and it didn't have any global implications," Yardeni told CNBC's " Trading Nation" on Friday. Instead, he sees it as analogous to a different event a decade even earlier. Personal Loans for 670 Credit Score or LowerĮd Yardeni, president of Yardeni Research, says it's unlikely Evergrande will have a fallout quite as severe as the Lehman bankruptcy when the global economy and credit markets collapsed. Personal Loans for 580 Credit Score or Lower SHANGHAI, March 6 (Reuters) - Macrolink Holding Co on Friday became Chinas first developer to default on its bonds due to the coronavirus outbreak as the industry struggles with stagnant. Their worsening credit conditions have hit equity and bond prices of even the largest developers in recent months.Ī 3.125% October 2025 bond issued by China's biggest developer by sales, Country Garden (2007.HK), has fallen about 17% this year to 73 cents as of Tuesday.Īccording to Refinitiv data, the developers face debts worth $27 billion coming due in the first quarter of this year, and $31 billion in the second quarter.Best Debt Consolidation Loans for Bad Credit read moreĬhina Evergrande Group (3333.HK) has been struggling to repay more than $300 billion in liabilities, including nearly $20 billion of offshore bonds deemed in cross-default by ratings agencies last month after it missed payments. Key Points Snowed under its crushing debt of 300 billion, Evergrande is so huge that the fallout from any failure could hurt not just China’s economy. 65 Macy’s and Costco sound a warning about the economy Another Chinese real estate developer is struggling to pay its debts By Jill Disis, CNN Business Published 5:49 AM EDT, Mon October 11.
The slowdown in the sector further pressured developers, with property investments in December falling at the fastest pace since early-2020, clouding the country's outlook despite a robust headline economic growth figure. Another major Chinese developer has defaulted on its debt, dealing a new blow to the ailing real estate sector in the world’s second largest economy. Developers in the country are facing an unprecedented liquidity squeeze as years of regulatory curbs on borrowing lead to a string of offshore debt defaults and credit rating downgrades.
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