Evergrande Group Rebounds as its NEV Unit Shares Plunge

Evergrande Group Rebounds as its NEV Unit Shares Plunge

On Monday, China Evergrande Group rebounded while its new energy vehicle (NEV) unit sharply plunged. 

The embattled real estate developer increased 5.51% or 0.02 points to $0.32 per share. At the same time, it significantly reversed its decline of 11.61% to $0.30 last Friday.

Meanwhile, the Hong Kong-listed NEV unit sank 12.56% or 0.04 points to $0.25. The business followed its massive slip of 26.00% to $0.21 last week. 

The decline of the automaking unit occurred after it scrapped its Shanghai listing plan.

Accordingly, the finances of the company weaken amid the liquidity crisis of its parent firm. 

Furthermore, it already missed some salary payments to its employees. It also fell behind on paying several suppliers for its factory equipment. 

In addition, the trial production of its electric vehicles in Shanghai and Guangzhou dialled back.

The mentioned cash flow difficulties hinted that it would miss its target to initiate mass deliveries next year. 

As a result, the new energy car making unit warned the market of an uncertain future unless it would receive a swift injection of cash.

Subsequently, the warning is the most apparent clue that the crisis slowly spreads to other business units. 

In the broader market, concerns about the possible ripple effect of the Evergrande Group woes slightly eased. 

Moreover, China Evergrande failed a payment deadline last week, and it is still silent on the matter. 

On September 29, it should make a $47.50 million bond interest payment on its 9.50% March 2024 dollar bond.

In line with this, experts kept an eye close to a possible meltdown of the troubled company that could significantly weigh on the economic recovery. 

Asian Market Mixed as Evergrande Group Rebounded

Meanwhile, shares on the Asian market were mixed as Evergrande Group rebounded. 

In China, the Shanghai Composite index edged down 1.05% or 37.78 points to $3,575.28 per share. 

Likewise, the benchmark Shenzhen Component decreased 0.18% or 25.30 points to $14,332.55 per share. 

Accordingly, Japanese stocks traded lower as the market opened. 

The Nikkei 225 index shed 0.03% or 8.75 points to $30,240.06 per share.

At the same time, the broader TOPIX index tumbled 0.14% or 3.01 points to $2,087.74 per share. 

Then, Hong Kong’s Hang Seng index improved 0.24% or 58.24 points to $24,250.40 per share. 

Similarly, South Korea’s KOSPI extended 0.27% or 8.48 points to $3,133.72 per share.