Due to the two-year crisis in the Chinese real estate market, the loss of investors in Chinese bonds is estimated to be 130 billion dollars. About author financial times.
The publication noted that the two-year crisis in the Chinese real estate market has resulted in the depreciation of more than 60% of the bonds issued, which have lost almost a third (30%) of their original value. .
According to Cedric Lai, senior credit analyst at Moody’s Investors Service, unfavorable market conditions, supported by a negative information history, are causing bonds to depreciate, which are already significantly depreciating compared to 2021. Therefore, a series of loan defaults can be expected in 2022, particularly from large developers with low home sales and large amounts of foreign currency debt.
According to the FT, some Chinese developers’ dollar bonds are currently trading near default. For example, a major developer Kaisa Group’s bonds due Sept. 7 are $0.09 per $1 face value. That is, investors’ losses could exceed $272 million in bonds worth $300 million.
July 18 Bloomberg cited experts interviewed reportedHe noted that the foreign presence in the Chinese capital market is constantly decreasing, while foreign investors are increasingly ignoring China due to the consequences of some of the country’s leader Xi Jinping’s political decisions.