Evergrande Rises on Hong Kong Stock Exchange After Interest Payment

Evergrande shares rose on the Hong Kong stock exchange on Friday. Investors reacted with relief to the news that the Chinese real estate group made a long-awaited interest payment on one of its loans just in time. The ailing company thus manages to prevent it from being officially labelled as a defaulter.

 

Evergrande gained 3.5 percent and helped the Hang Seng index in Hong Kong to an interim gain of 0.1 percent. Evergrande is burdened with more than $302 billion debt and has already missed three deadlines for interest payments on loans in recent weeks.

The real estate developer had until Saturday, October 23 at the latest, to pay the interest on one of these loans and avoid default. However, sources confirmed to Reuters and Bloomberg news agencies that Evergrande did indeed transfer $83.5 million before the expiration of the 30-day waiting period after the September 23 deadline.

Evergrande plunged 12.5 percent in value on Thursday after trading in the share resumed after more than two weeks. The price drop followed the company’s confirmation that talks about selling a majority stake in the real estate management branch Evergrande Property Services to industry peer Hopson have been discontinued. Evergrande Property Services, which has a separate listing, also accounted for part of the price loss from a day earlier and climbed more than 3 percent.

The other stock markets in the Asian region showed a mixed picture. The main index in Shanghai fell 0.2 percent. The Kospi in Seoul also lost 0.2 percent. However, Samsung SDI won 1.5 percent. The South Korean maker of electronic components has teamed up with car manufacturer Stellantis to make batteries for electric cars for the North American market.

The Nikkei in Tokyo was 0.3 percent higher into the weekend at 28,804.85 points. Japanese technology companies were among the strongest climbers. Chip equipment maker Disco gained 3 percent thanks to a sharp increase in the company’s profits. Industry peers Tokyo Electron and Screen Holdings rose around 5 percent. At the presentation of the quarterly figures, CEO Pat Gelsinger of the American chipmaker Intel said that the worldwide chip shortages could continue into 2023.

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