After the trading halt in the shares of China’s heavily indebted real estate giant China Evergrande, the shares were traded again on the trading floor in Hong Kong on Tuesday. The shares of the Evergrande Group and the Evergrande Real Estate Service Group will be traded again from 9:00 a.m. (local time), the Hong Kong stock exchange announced. The group had previously announced that it had applied to resume trading.
On September 28, the company from Shenzhen in southern China stopped trading its shares on the Hong Kong stock exchange. The real estate giant has been in a serious crisis for years and is in debt amounting to tens of billions of euros. According to the company, the authorities are also investigating CEO Hui Ka Yan and other employees. However, the board of directors decided that no further insider information from the company needed to be published, the group announced on Monday. China Evergrande also said it was recently unable to meet deadlines for repaying outstanding debts.
In addition to China Evergrande, other large property developers also have debts. The entire real estate industry in the world’s second largest economy has been going through a serious crisis for a long time. Because the sector contributes a significant part to China’s economic output, there are concerns that the crisis could affect the economy of the entire country with around 1.4 billion inhabitants.
One reason for the crisis is the reduced demand for apartments. In addition, according to some analysts, the real estate companies were not investing sustainably and were unable to complete promised projects or service outstanding loans without their buyers’ money. The government in Beijing tried to halt the development that had been noticeable in the industry years ago and introduced stricter rules for financing companies.
