INSUBCONTINENT EXCLUSIVE:
Global investors have been on tenterhooks in recent weeksChina Evergrande Group will make it a top priority to help retail investors redeem
their investment products sold by the indebted property giant, its chairman said, as uncertainty looms over interest payment due for a
dollar bond on Thursday.Hui Ka Yan's statement came after the developer said on Wednesday it had "resolved" a coupon payment on an onshore
bond, pushing the company's stock price to its biggest single-day percentage rise since its listing in 2009.Global investors have been on
tenterhooks in recent weeks as debt payment obligations of Evergrande, labouring under a $305 billion mountain of debt, triggered fears its
malaise could pose systemic risks to China's financial system.The company faces $83.5 million in dollar-bond interest payments due on
Thursday on a $2 billion offshore bond
And more payments are coming due next week, with a $47.5 million dollar-bond interest payment due.Without mentioning the offshore debt, the
chairman late on Wednesday urged his executives to ensure the quality delivery of properties and redemption of wealth management products
held by millions of mainly retail investors.There is mounting political pressure on the company to act as homebuyers and retail investors
grow increasingly angry of having sunk their savings in its properties and opaque wealth management products."Assuming this situation goes
the way of a debt restructuring ..
we think the retail investor nature of the wealth management products would be prioritised for social stability," said Ezien Hoo, credit
analyst at OCBC Bank.Foreign investors, who hold paper issued by offshore entities, might find it harder to get paid as they had "lower
resumed after a public holiday, though gains were soon pared and months of heavy losses still leave the stock down more than 80% for the
year to date.Evergrande's property services unit also climbed
The sense of relief spread to mainland property stocks listed in Hong Kong, with Country Garden, China's largest developer, up as much as
Partners Capital Ltd, said Evergrande was wary of enflaming social tensions by leaving homes unbuilt, construction workers unpaid and retail
investors counting their losses.Once those priorities had been met, Evergrande would talk to its other creditors, he said, adding:
"Otherwise a few hundred thousand people will fight with the government."A company spokesperson did not immediately respond to request for
once China's top-selling developer, ran into trouble over the past few months as Beijing tightened rules in its property sector to rein
back too much debt and speculation.Investors worry that the rot could spread to creditors including banks in China and abroad, though
analysts have been downplaying the risk that a collapse would result in a "Lehman moment", or a systemic liquidity crunch.Fitch Ratings said
country's property sector on domestic demand.Underscoring the scramble to avoid contagion risk, Chinese Estates Holdings, the No.2
shareholder of Evergrande, said on Thursday it had sold $32 million worth of its company stake and planned to exit the holding
completely.Some analysts say it could take weeks for investors to have any clarity about how the Evergrande situation will resolve."The
company could restructure its debts but continue in operation, or it could liquidate," wrote Paul Christopher, head of global market
strategy at Wells Fargo Investment Institute
In either case, investors in the company's financial instruments likely would suffer some losses, he wrote."In the event of a liquidation,
however, Chinese and global investors could decide that the contagion could spread beyond China," he added.United States
parallel with the United States corporate sector.
