G20: what did the leaders decide?
The G20 summit took place in Bali, Indonesia, on November 2022…
Why Everyone Is So Concerned About Evergrande?
Information is not investment advice
You have probably heard of China’s company Evergrande which can’t pay its bills and may collapse. But why does this company have such a strong impact on the global markets? Bitcoin crashed by 10% in 24 hours on bankruptcy fears for China’s Evergrande Group and then dropped the next day as well. What? Bitcoin and China’s real estate company? How are they even connected? Let’s find out.
What is Evergrande?
Evergrande is one of the biggest real estate companies in China. It became famous because of its residential property: it "owns more than 1,300 projects in more than 280 cities" in China. The real estate giant is also engaged in electric vehicles, theme parks, and even a soccer team.
It confuses everyone that this giant company will soon be unable to meet its obligations! It has resulted in chaos in China. Evergrande’s customers and business partners aren’t satisfied: some want their houses built, others want their capital back, and what about the firm’s employees? You got it: complete chaos.
How big is Evergrande’s collapse?
It is said that Evergrande owes nearly $300 billion, which accounts for 6% of the total debt for China’s property sector—to creditors, investors, and other stakeholders.
Market fear
Well, investors remembered the 2008 housing crisis and were afraid that this situation with Evergrande is similar to it and may lead to the overall crisis as well. What does happen usually when fear engulfs the markets? Right, investors start selling riskier assets to park their capital in a safer place and wait out the storm. As a result, the stock market crashed.
Tech outlook
The Honk Kong’s Hang Seng Index (HK 50) has been already having a tough time because of China’s pressure on tech stocks such as Alibaba and Tencent, but Evergrande’s news pressed the stock even more. If the HK 50 drops below the low of September 20 at 23,860, it may drop to one-year lows of 23,160.
Remember that with FBS you can open both buy and sell positions.
Similar
The End of Era: What Might the UK Face Next?
The deafening news shocked the whole world yesterday: the British Queen Elizabeth II died peacefully at the age of 96…
Why didn't oil prices calm despite OPEC+ attempts?
After months of pressure from the White House, Saudi Arabia relented and agreed with other OPEC+ members to increase production.
Popular
What Will Happen with the Euro? An Economic Perspective.
eurusd-is-falling-what-to-expect-from-the-future-price-movement
Will Australia's "Rampant Inflation" Prevail in May?
Greetings, fellow forex traders! Exciting news for those with an eye on the Australian market - the upcoming interest rate decision could be good news for Aussies looking to refinance or take out new loans. The Mortgage and Finance Association Australia CEO, Anja Pannek, has...
How Will BoJ Meeting Affect the Yen
Hold onto your hats, folks! The Japanese yen took a nosedive after the Bank of Japan (BOJ) left its ultra-loose policy settings unchanged, including its closely watched yield curve control (YCC) policy. But wait, there's more! The BOJ also removed its forward guidance, which had previously pledged to keep interest rates at current or lower levels. So, what's the scoop? Market expectations had been subdued going into the meeting, but some were still hoping for tweaks to the forward guidance to prepare for an eventual exit from the bank's massive stimulus
Choose your payment system
