Market Analysis

Evergrande – the calm before the storm?

The Chinese real estate company decided to pay part of its debts on time. The announcement by the company was made on Wednesday in a statement to the Shenzhen Stock Exchange. Accordingly, an interest payment has been agreed for a bond that runs until 2025. According to Bloomberg, the interest payments amount to 232 million yuan (approx. 30,5 Million Euros). However, it is not clear whether further outstanding debts will also be settled at the same time.

The markets in the USA and Europe have now calmed down somewhat, but the Asian markets still seem to be skeptical and are accordingly still in the red. There is no telling what economic consequences a bankruptcy of the real estate giant will have and whether the problem will only be limited to China. According to observations, comparisons are now being made with the bankruptcy of the US investment bank Lehman Brothers, which triggered a global financial crisis in 2008. How the Chinese government will react remains to be seen. There seems to be a possibility that Beijing could intervene at the last minute.

The recovery in the DAX continued as it gained 1.03 percent and closed at 15506 points on Wednesday. The S&P 500 also ended the day on a positive note with a plus of 0.95% at 4395 points.

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