HK shares edge off 1-year low, but Evergrande jitters cap gains

Finance | 21 Sep 2021 5:16 pm

Hong Kong stocks recovered some lost ground to end higher on Tuesday, though investor fears about contagion risks from debt troubles at property developer China Evergrande remained a drag.

The Hong Kong benchmark, which sank in the morning trade to its lowest level since last October, finished the day up 0.51%.

Shares of China Evergrande fell 0.44%, their smallest daily decline in more than a week, but still finished at their lowest close in 10 years.

An index tracking property and construction stocks gained 2.93%, recovering from sharp losses marked in the previous session, led by an 11.8% surge in Guangzhou R&F Properties after the company said it would raise $2.5 billion by borrowing from major shareholders and selling a subsidiary.

"The market sentiment improved a bit on R&F fund raising cheers," Steven Leung, a sales director at UOB Kay Hian in Hong Kong said, adding that default risk was still a significant concern.

Mainland Chinese stock markets are closed for the mid-autumn festival and will reopen on Wednesday, Sept. 22. Hong Kong markets will be closed on Wednesday.

Evergrande, China's most indebted developer, faces a major test this week as it is due to pay $83.5 million in interest relating to its March 2022 bond on Thursday. It has another $47.5 million payment due on Sept. 29 for March 2024 notes.

Evergrande is confident it will "walk out of its darkest moment" and deliver property projects as pledged, its chairman said in a letter to staff reported by local media.

Overnight, the S&P500 shed 1.70%, its biggest drop in four months, which analysts attributed to worries about Evergrande shaking already jittery markets.

Gaming stocks also rose in Hong Kong on Tuesday, lead by MGM China, up 7.1%, after senior Macau casino and junket executives met with authorities seeking details on proposed regulatory changes, and Hong Kong property stocks rebounded following a sell-off in the previous session

The Hong Kong dollar and Chinese yuan, traded offshore, steadied above their three-week lows against the dollar hit on Monday. -- Reuters 

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