China: Chinese real estate giant Evergrande’s shares have surged when trading resumed in Hong Kong after it was paused last week.
Shares surged over 40 percent initially and remained 20 percent higher later on. Last week, trading for Evergrande and its subsidiaries was halted due to reports of the company’s chairman, Mr. Hui Ka Yan, being under police surveillance. The company later confirmed an investigation into suspected “illegal crimes” involving him.
“There is currently no other inside information in relation to the company that needs to be disclosed,” Evergrande said in a statement.
Last week’s trading halt came a month after a 17-month suspension in the shares was lifted, as per the statement. Evergrande has faced significant challenges, causing its stock market value to plunge by nearly 99 percent since July 2020, reaching just $0.049.
Evergrande has been struggling with a massive debt of $248 billion and defaulted on its international debts in late 2021. It came when the government officials tightened scrutiny on the real estate sector. This has contributed to a crisis in China’s property sector, negatively impacting economic growth.
The crisis worsened last week when Evergrande’s primary division in China, Hengda Real Estate, failed to meet a debt obligation of $552 million. The company mentioned it couldn’t issue new debt due to an ongoing investigation, a crucial element of its planned reorganization.
China’s real estate industry is still facing chaos as major developers struggle to finish housing projects. This has sparked protests and mortgage boycotts from frustrated homebuyers.
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