It's default time for Evergrande

Hong Kong shares of the troubled property developer Evergrande continue to tumble bringing the shares with Chinese exposure across the board into risk-off mood:

"Another Chinese property developer collapsed this afternoon in Hong Kong (dropping a massive 87%) before it was halted. Shanghai based developer Sinic… racing #Evergrande to the bottom. Get ready for a banking crisis in #HK AND #China," Kyle Bass tweets

The second largest property developer founder once even bragged that Evergrande could take on Elon Musk's Tesla because they were heavily investing into EV market.

Now, many fear that the default of the troubled Evergrande could lead to a financial distress of the whole property market in China.

It is unclear if Beijing authorities will be stepping in to calm down the situation around Evergrande, but it looks more likely that Beijing will not bail out, at least there are no such messages of them feeling obligated to help Evergrande. Most market players are now sure that China will not encourage the excessive lending players.

Over the weekend, the management of Evergrande was fully in a damage control mode:

Evergrande continues to say that they will try to meet their obligations. Today, Sep. 20, the company is supposed to meet their interest payments for local loans.

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