China government set to take control of Evergrande in an imminent deal – Asia Markets
In a fresh update on China Evergrande story, the indebted property development giant is likely to be restructured into three separate entities, in a fresh deal that could be announced within days, Asia Markets reports on Wednesday, citing sources close to the Chinese government.
The sources added that the Chinese Communist Party (CCP) is set to take control of Evergrande in an imminent deal.
Key quotes
“The deal is being designed to protect Chinese nationals who have bought apartments from Evergrande, like the ones you see protesting on the streets and also those who have invested in Evergrande’s wealth management products.”
“But the big thing is stemming any widespread economic flow-on effects that insolvency would cause on the China economy.”
Read: China’s another property group calls of bond trading, Evergrande’s foreign repayments loom
Market implications
The risk sentiment remains elevated on the renewed optimism surrounding China Evergrande. Although the above report has little to no impact on the risk trades, so far.
The S&P 500 futures are holding the higher ground near 4,380, up 0.57% on the day while AUD/USD is struggling to extend gains above 0.7250 amid falling iron-ore and copper prices.
Author
Dhwani Mehta
FXStreet
Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.
