The major Asia-Pacific stock indexes finished mixed but mostly lower on Friday as investors continued to approach the trade with caution due to lingering risks surrounding China Evergrande Group. Meanwhile, investors in Japan bucked the trend, driving the benchmark Nikkei higher on the back of strong gains from Fast Retailing and Softbank Group.
On Friday, Japan’s Nikkei Index settled at 30248.81, up 609.41 or +2.06%. Hong Kong’s Hang Seng Index finished at 24192.16, down 318.82 or -1.30% and South Korea’s KOSPI Index closed at 3125.24, down 2.34 or -0.07%.
In China, the Shanghai Index settled at 3613.07, down 29.15 or -0.8% and in Australia, the S&P/ASX 200 Index finished at 7342.60, down 27.60 or -0.37%.
Evergrande Stays Silent on Its $83 Million Dollar Bond Interest Payment, Leaving Investors in Limbo
Chinese property developer Evergrande has not said whether it will fulfil its interest payments on its U.S.-dollar bond – a key milestone investors have been keeping their eyes on, CNBC reported.
The interest payment due Thursday amounted to $83 million. It was for a $2 billion dollar-denominated bond that’s due to mature in March 2022. Dollar bonds are typically held by foreign investors.
As of Friday morning during Asia hours, the company had not made any announcement, or any filing to the Hong Kong exchange, leaving investors in limbo.
Evergrande has another coupon payment due this Wednesday – a 7-year U.S. dollar-denominated bond maturing in March 2024, according to Refinitiv Eikon data.
For the rest of the year, Evergrande has interest payments due each month in October, November and December.
China Asks Local Officials to Prepare for ‘Possible Storm’ if Evergrande Fails ~ Wall Street Journal
Chinese authorities have told local officials to prepare for a potential demise of heavily indebted property developer Evergrande, The Wall Street Journal reported last Thursday. Bloomberg also reported on Thursday that authorities in Beijing told the company not to default on those dollar-denominated interest payments.
Local officials described the signals from Chinese authorities as “getting ready for the possible storm” and said the government told them they should only step in at the last minute to prevent spillover effects from Evergrande’s demise, the WSJ report said.
The report indicates that the central government may still have a limited appetite for bailing out the company, despite the global implications. Fears about Evergrande not being able to make interest payments have grown in recent weeks and were seen as one of the causes for market sell-offs around the world last Monday, CNBC said.