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24 Jan 2022
Evergrande Shares Surge after Admission of State Company Bureaucrat to Board
The Index Today
On Monday, shares of cash-strapped firm China Evergrande Group soared following the appointment of a state company bureaucrat to its board. Additionally, two of Evergrande’s peers have sold assets to government firms in a bid to facilitate government support for the debt-ridden company.
Evergrande’s shares soared by 6.2% by 0600 GMT. This comes amid looming expectations of a provincial government acquisition of the firm as the province of Guangdong initiates a company restructuring of Evergrande. The surge in its shares can also be attributed to a positive report by REDD that underscores the restructuring by the Government of Guangdong.
The Evergrande Group has been mired in a series of heavy debts amounting to about $20 billion in international bonds and over $300 billion in liabilities, following a major default in payments in 2021.
The Hang Seng Mainland Properties sub-index rose by 0.6% while Shimao Group and Agile Group soared by 3.3% and 7.6% respectively.