Modern Land, a small competitor of struggling real estate firm China Evergrande, did not pay interest on the bond and justified this by an unexpected cash crunch.
Investors fear a crisis across the entire Chinese real estate market. The industrial index CSI300 real estate fell 2.6 percent, while the real estate index in Hong Kong fell five percent.
“It’s always a question of who’s next,” said the investor, who reveals the Chinese high-yield bond market. Real estate companies are now in “one after another” problem.
Unrest in financial markets
Evergrande’s tariff crisis has been causing unrest in financial markets for weeks. The group, which is in debt of more than $ 300 billion, has in many cases been unable to pay the loan interest.
Last week, however, Evergrande paid interest on a dollar bond and offered relief. Evergrande resumed work on construction projects. The announcement by Modern Land blew the wind out of the sail of investors. Evergrande shares lost initial gains and fell six percent. Modern land rights are not traded. (SDA)