Global Markets Sink Amid Growing Fears Of Chinese Real Estate Giant Defaulting

Global Markets Sink Amid Growing Fears Of Chinese Real Estate Giant Defaulting

Global stock markets recorded losses on Monday amid concerns over China's Evergrande real estate company potentially defaulting on its debts

MOSCOW (Pakistan Point News / Sputnik - 20th September, 2021) Global stock markets recorded losses on Monday amid concerns over China's Evergrande real estate company potentially defaulting on its debts.

London's FTSE 100 lost 0.86%, Germany's DAX 2.31%, France's CAC 1.74%. Stock markets in the US went down 2-2.6%, while markets in Hong Kong and Australia lost 2-3%.

Evergrande, the second largest real estate developer in China, with 123,000 employees and some 1,300 development projects, is facing $300 billion in liabilities.

Hong King's Hang Seng Index plummeted 4.2%, following a drop of 10.2% in Evergrande group's share price, which is traded in the Chinese Index, according to the South China Morning Post newspaper. The price per share for Evegrande group was 2.28 Hong Kong Dollars ($0.29) on Monday, which is less than the company's IPO price of 3.5 Hong Kong dollars ($0.45) in 2009, according to Yahoo Finance data.

In June, Evergrande reportedly admitted that it didn't meet the payment of a commercial paper. Earlier in September, Fitch downgraded Evergrande's long term debt, stating that the Chinese giant was facing a 'high default risk', according to the credit agency's website.

Financial markets worry that a hypothetical default of Evergrande, as well as late payments, could send shockwaves through the Chinese economy, and the crisis could spread to the financial system of the country and create systemic risk in the second largest economy in the world.