Hong Kong Stock Market Stabilizes After Plunge Amid 'Hengda Crisis'... Closes Slightly Higher

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Bu Aeri] As the liquidity crisis of Evergrande, China's largest private real estate company, has emerged as a source of instability in global stock markets, the Hong Kong stock market, which plunged the previous day, closed slightly higher on the 21st.

On this day at the Hong Kong Stock Exchange, the Hang Seng Index closed at 24,221.54, up 0.51% from the previous trading day.

Evergrande's stock price, which was the epicenter of the crisis and had plunged more than 10% the previous day, fell 0.44% on this day.

Amid the stock price plunge of real estate developers in mainland China and Hong Kong, including Evergrande, which raised concerns about default, the Hang Seng Index plunged 3.3% the previous day. This rapidly spread anxiety throughout the global financial markets.

Xu Jiayin, the founder of Evergrande, expressed his determination to overcome the crisis in an internal letter sent to executives and employees on the occasion of the Mid-Autumn Festival, stating, "Through the joint efforts and hard struggles of the executives and all employees, Evergrande will surely be able to quickly emerge from this dark time." However, the market predicts that Evergrande may eventually fall into default and, in the worst case, go bankrupt.

According to Bloomberg News, the maturity and coupon payment date of some bonds issued by Evergrande are approaching on the 23rd. It is expected that this will be the first opportunity to gauge Evergrande's ability to repay its debts amid the severe liquidity crisis.

Meanwhile, the mainland China stock market, which was closed on the 20th and 21st due to the Mid-Autumn Festival holiday, will reopen on the 22nd, and the shockwave from the Hong Kong stock market plunge on the 20th is expected to have a delayed impact.

This content was produced with the assistance of AI translation services.