China Not 'Dumb' Enough for Lehman Moment, StanChart CEO Says

China Not 'Dumb' Enough for Lehman Moment, StanChart CEO Says

October 13, 2021

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(Bloomberg) -- China’s property market faces pressure in the fourth quarter as the authorities continue to tighten controls, the state-run China Securities Journal reported, citing research institutions.

Most developers are more cautious about bidding to buy land in the second half of the year amid a grim outlook for financing and falling profit margins, the newspaper reported, citing a research note by CSC Financial Co.

Beijing won’t allow the turbulence surrounding China Evergrande Group to turn into a systemic crisis, the chief executive officer of Standard Chartered Plc said, adding that the Asia-focused lender has no “concerning exposures to the property sector.”

“This idea that this was something of a Lehman moment for China: I don’t think China’s frankly that dumb,” Bill Winters said in an interview with Bloomberg Television on Tuesday.

More than 24 hours have passed without any clarity about whether embattled developer Evergrande has delivered interest payments due Oct. 11 for three of its dollar bonds. There is a 30-day grace period before any missed payment would constitute a default.

Evergrande’s next test of investor confidence will be on Oct. 19, when 121.8 million yuan ($16.4 million) worth of coupons come due for a 5.8% domestic bond. It then has to deliver interest payments for two dollar bonds on Nov. 6.

Key Developments:

China Not ‘Dumb’ Enough for Lehman Moment, StanChart CEO Says
Evergrande Halt Has Nothing on 11 Years: What to Watch in China
Once-Resilient China Property Dollar Bonds Mired in Rout: Chart
China Property Market May Cool Further in 4Q: Securities Journal
Will China Blink and Stop the Evergrande Meltdown?: Shuli Ren
China Faces Tough Trade-off in Dealing With Evergrande, IMF Says

The property market faces cool-down pressure in the fourth quarter as the government’s property control policies remain tight, China Securities Journal reported, citing unidentified research institutions.

Most developers have become more prudent in their bidding in the second half of this year amid a grim outlook for financing and falling gross margins for the whole sector, the report cited a research note by CSC Financial Co. as saying.

The Chinese government won’t allow the turbulence surrounding Evergrande to turn into a systemic crisis, the chief executive officer of Standard Chartered Plc said.

The lender, which has a heavy focus on Asia, has no “concerning exposures to the property sector,” CEO Bill Winters said in an interview with Bloomberg Television recorded in London on Tuesday.

Evergrande’s trading halt has led to days without a company statement detailing the reason -- and it’s all too familiar for Hong Kong traders who’ve had to navigate dozens of similar episodes this year alone.

Some 81 stocks on Hong Kong’s main board have been suspended for three months or more, according to exchange data as of Sept. 30. Most were halted in 2021, including China Huarong Asset Management -- the bad-debt manager that roiled markets after delaying its earnings report. In the U.S., suspensions are capped at just 10 days.

China faces tough trade-offs in dealing with the fallout from the financial troubles at Evergrande, the International Monetary Fund said.

On the one hand, the country risks being seen as backing off from its economic deleveraging drive if it provides too much support to Evergrande and other affected companies, the Washington-based lender said Tuesday in its semiannual Financial Stability Report. On the other hand, it could spur more stress if it puts off arranging backing for the financial system.