![]() The Russell 2000 dropped 2.4 per cent to 2,182.20. The Dow Jones Industrial Average fell 1.8 per cent to 33,970.47. The S&P 500 was coming off two weeks of losses and is on track for its first monthly decline since January. The S&P 500 tumbled 1.7 per cent on Monday to 4,357.73, its biggest drop since May. Spillover effect: Global stocks crash Evergrande's shares tumbled more than 10 per cent on Monday as Chinese regulators warned that its $305 billion in liabilities could lead to widespread losses in China's financial system if its debts are not stabilised. The company's founder Xu Jiayin was China's richest businessman in 2017 with a net worth of $43 billion. At present, it has 1,300 projects spanning across 280 cities. It employs more than 2 lakh workers and supports 3.8 million jobs in the sector. It has now also forayed into electric vehicles, theme park development, health clinics, mineral waters and other businesses. Evergrande was founded in 1996 and is one of the country's largest builders of apartments, office towers and shopping malls. Some even made full cash payments upfront for homes that took years to be built. Epitome of China's housing sector The once-mighty Evergrande Group was an epitome of the housing sector in China with people lining up to get possession of a house. The developer also financed construction with the help of short-term IOUs, known as commercial bills, that it issued to contractors and building-materials suppliers. According to reports Evergrande also borrowed heavily, including by by requiring employees of its construction contractors to buy its debt. ![]() The country total borrowing - including corporate, government and household - jumped to nearly 300 per cent of economic output in 2020 as against 270 per cent in 2018. That's when problems began to mount for Evergrande as well. Regulatory authorities stepped by efforts after the coronavirus pandemic battered the real estate market completely. ![]()
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