This Is the Evergrande Endgame as China’s Property Problems Spread
Odd Lots
Bloomberg
4.5 • 2K Ratings
🗓️ 27 January 2022
⏱️ 49 minutes
🧾️ Download transcript
Summary
Late last year, the big Chinese property developer Evergrande started running into severe financial distress, as its bonds tumbled and frustrated customers faced delays in getting their homes. Since then, it's gotten worse. Evergrande is still troubled, as are other property developers who have also run into stress. So what does it mean, and what are China's goals here? On this episode, we speak with Travis Lundy, an independent analyst on the Smartkarma platform, who has studied these companies in depth. He explains why things have gotten worse, and what China's goals are with a property sector that historically has been so crucial to its economic model.
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| 0:54.0 | Hello and welcome to another episode of the Odlots Podcast. I'm Tracy Alloway. |
| 0:59.3 | And I'm Joe, why isn't all? So Joe, it feels like it's another day, another default by a Chinese |
| 1:06.0 | property developer. And so just today, I should say we're recording this on January 20th. |
| 1:12.2 | We saw a company called Oyan. I'm probably not pronouncing that right, saying that it won't |
| 1:17.8 | make payments on four bonds that I think add up to almost $700 million. But here's the weird |
| 1:27.2 | thing. For a brief moment this week, it seemed like people, investors were getting more |
| 1:32.8 | optimistic about the Chinese real estate space. We actually saw a pretty dramatic rally in dollar |
| 1:38.5 | bonds from junk rated property developers because there were some reports that China would make it |
| 1:44.2 | easier for property companies to get cash from pre sales of developments. And then of course, |
| 1:50.0 | we saw China lower its interest rates earlier this week, which obviously monetary easing is |
| 1:57.0 | going to be good for housing. So there seem to be these really opposite push pull factors at the |
| 2:03.6 | moment. And no one seems to know quite what is going on in the space. |
| 2:08.8 | I have to say, I kind of missed in all my scanning of the news, I actually kind of missed the |
| 2:14.4 | optimism period you were talking about because every time I mean, it was only a day we're back |
| 2:21.1 | to pessimism already because I have to say like every time I read, like, you know, obviously look |
| 2:27.7 | sort of like Q4 of last year, we're talking a lot about Evergrande and the trouble they were |
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