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☆ Wanxiang Trust: Another Chinese ‘shadow bank’ faces major financial trouble
▼ + stars: | 2023-12-05 | by ( Laura He | ) edition.cnn.com time to read: +4 min

A trust company usually manages funds for individuals, companies or other entities. The reports come two weeks after Zhongzhi Enterprise Group, another major shadow bank, declared itself “insolvent” after missing payments to its investors. Moody’s Investors Services also warned in September that China’s trust sector could face liquidity challenges during the current property downturn. The two medical trust products were related to a hospital project in Guizhou, which is one of China’s most indebted provinces, according to Cailianshe. Last month, at its twice-a-decade Central Financial Work Conference, the Chinese leadership stressed the importance of addressing risks more systematically across the financial sector and preserving overall stability.

Persons: Hong Kong CNN —, Cailianshe, Wanxiang, hasn’t, Zhongzhi Organizations: Hong Kong CNN, Hong Kong CNN — Wanxiang Trust, Century Business Herald, Wanxiang Group, Zhongzhi Enterprise Group, ”, Zhongrong, Zhongzhi Enterprise Group Bloomberg, Getty, Fitch, Moody’s, Services, Kaisa, CNN Local, Financial Work Conference Locations: China, Hong Kong, Hangzhou, Zhejiang, Beijing, Guizhou

☆ Executives go missing in China—this time linked to troubled shadow bank Zhongzhi
▼ + stars: | 2023-12-01 | by ( Laura He | ) edition.cnn.com time to read: +4 min

Hong Kong CNN —Two Chinese business executives at companies controlled by the embattled financial conglomerate Zhongzhi have gone missing, according to statements by their respective firms. The development comes just days after Chinese authorities launched a criminal investigation into the troubled shadow bank, one of China’s largest. Both companies are controlled by Zhongzhi’s investment units, and the missing executives have been connected with the conglomerate for years. The office building of Zhongrong International Trust, a trust company partially owned by Zhongzhi Enterprise Group, in Beijing. Zhongzhi’s trust banking unit has invested about a tenth of its money in real estate.

Persons: Zhongzhi, Ma Hongying, Ma Changshui, Florence Lo, Xie Zhikun, —, ”, Xie, Xi Jinping Organizations: Hong Kong CNN, Gym Education Technology, Shenzhen Stock Exchange, International Trust, Zhongzhi Enterprise Group, Beijing, Business Locations: Hong Kong, Dalian, Xinjiang, Beijing, China’s, China

☆ China police launch probe into troubled financial conglomerate Zhongzhi
▼ + stars: | 2023-11-27 | by ( Laura He | ) edition.cnn.com time to read: +4 min

The Beijing police has launched a probe into the wealth management unit of Zhongzhi Enterprise Group, the authorities said over the weekend. Xie Zhikun, the founder of the group, died of a heart attack in December 2021, but his nephews hold key posts in the group, according to Chinese state media. Under China’s Criminal Procedural Law, “criminal mandatory measures” can mean anything from bail pending trial or house arrest to detention or arrest. The office building of Zhongrong International Trust, a trust company partially owned by Zhongzhi Enterprise Group, in Beijing, China August 22, 2023. A major reason behind the company’s financial woes is its strong links with China’s real estate sector.

Persons: Zhongzhi, Xie, Xie Zhikun, Florence Lo, ” Zhongzhi Organizations: Hong Kong CNN, Beijing, Zhongzhi Enterprise Group, International Trust, Reuters, CNN, Trust Locations: Hong Kong, Beijing, China, China’s

☆ Beijing police launch investigation into troubled wealth manager Zhongzhi
▼ + stars: | 2023-11-25 | by ( ) www.reuters.com time to read: +2 min

The office building of Zhongrong International Trust, a trust company partially owned by Zhongzhi Enterprise Group, in Beijing, China August 22, 2023. REUTERS/Florence Lo Acquire Licensing RightsSHANGHAI, Nov 25 (Reuters) - Beijing police are investigating suspected crimes committed by Zhongzhi Enterprise Group, a leading Chinese wealth manager, according to a social media post published by the Chaoyang Public Security Bureau on Saturday. Zhongzhi did not immediately reply to an email request for comment after normal business hours on Saturday. Zhongzhi apologised to its investors in a letter issued on Wednesday that said it had total liabilities of about 420 billion yuan ($58 billion) to 460 billion yuan ($64 billion), compared to estimated total assets of 200 billion yuan. The post did not specify what crimes Zhongzhi or the individuals were suspected of having committed.

Persons: Florence Lo, Zhongzhi, Casey Hall, Mark Potter Organizations: International Trust, Zhongzhi Enterprise Group, REUTERS, Rights, Chaoyang Public Security, Thomson Locations: Beijing, China, China's

☆ China wealth manager Zhongzhi flags insolvency, $64 bln in liabilities
▼ + stars: | 2023-11-23 | by ( ) www.reuters.com time to read: +4 min

BEIJING, Nov 23 (Reuters) - China's Zhongzhi Enterprise Group, a leading wealth manager, told investors it is heavily insolvent with up to $64 billion in liabilities, threatening to reignite concerns that the country's property debt crisis is spilling over into the broader financial sector. The firm, which has sizable exposure to China's real estate sector, apologised to its investors in a letter that said it had total liabilities of about 420 billion yuan ($58 billion) to 460 billion yuan ($64 billion). The liabilities compared to Zhongzhi's estimated total assets of about 200 billion yuan, according to the letter, which was issued on Wednesday and was seen by Reuters. 'ENORMOUS' HOLESigns of trouble at the Zhongzhi group first came to light in July when Zhongrong International Trust Co, a leading trust company controlled by Zhongzhi, missed payments on dozens of investment products. "The Zhongzhi group deeply apologises for the losses caused to investors.

Persons: Zhongzhi, Xu, Xing Zhaopeng, Christopher Beddor, Beddor, Ziyi Tang, Ryan Woo, Sumeet Chatterjee, Muralikumar Organizations: Zhongzhi Enterprise Group, Reuters, International Trust Co, Big, ANZ, Thomson Locations: BEIJING, Beijing, Zhongzhi, China's, China

☆ China wealth manager Zhongzhi flags insolvency, liabilities of $64 bln
▼ + stars: | 2023-11-23 | by ( ) www.reuters.com time to read: +3 min

The firm, which has sizable exposure to China's real estate sector, apologised to its investors in a letter that said it had total liabilities of about 420 billion yuan ($58 billion) to 460 billion yuan ($64 billion). The liabilities compared to Zhongzhi's estimated total assets of about 200 billion yuan ($27 billion), according to the letter, which was issued on Wednesday and was seen by Reuters. China's highly indebted property sector has been reeling from a liquidity crunch since 2020. Signs of trouble at the Zhongzhi group first came to light in July when Zhongrong International Trust Co, a leading trust company controlled by Zhongzhi, missed payments on dozens of investment products. "The Zhongzhi group deeply apologises for the losses caused to investors.

Persons: Zhongzhi, Ziyi Tang, Ryan Woo, Sumeet Chatterjee, Muralikumar Organizations: Zhongzhi Enterprise Group, Reuters, International Trust Co, Big, Thomson Locations: BEIJING, Beijing, Zhongzhi, China's, China

☆ Zhongzhi Enterprise Group: Chinese shadow bank can’t pay its bills
▼ + stars: | 2023-11-23 | by ( Diksha Madhok | ) edition.cnn.com time to read: +3 min

New Delhi/Hong Kong CNN —A major wealth management company in China has told investors it can’t pay all its bills, reigniting fears that the country’s long-running real estate slump may be spilling over into the $3 trillion shadow banking sector. Zhongzhi Enterprise Group (ZEG) wrote to investors on Wednesday, disclosing that it was “severely insolvent,” according to a report in Chinese state-owned news outlet lanjinger.com, citing a letter from the shadow bank, which it also published. CNN is unable to verify the letter or its contents, and ZEG did not respond to a request for comment. Analysts have estimated that the trust industry, or “shadow banking” sector, is worth $2.9 trillion, making it bigger than the French economy. Shadow banks typically provide financing through off-balance-sheet activities or via non-bank financial institutions, such as trust firms.

Persons: ZEG Organizations: Hong Kong CNN, Zhongzhi Enterprise, Reuters, CNN, Zhongrong, Trust, Investors Locations: China, New Delhi, Hong Kong, Beijing

☆ China wealth manager Zhongzhi flags insolvency, $64 billion in liabilities
▼ + stars: | 2023-11-23 | by ( ) www.reuters.com time to read: +4 min

☆ Asian shares drop as investors brace for central bank-packed week
▼ + stars: | 2023-09-18 | by ( Stella Qiu | ) www.reuters.com time to read: +4 min

U.S. West Texas Intermediate crude futures gained 0.8% to $91.52, their highest level since November, while Brent crude futures rose 0.7% to $94.55 per barrel. In Asia, MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) fell 0.7%. This week, global central banks will take centre stage, with five of those overseeing the 10 most heavily traded currencies holding rate-setting meetings. Last Friday, Wall Street ended sharply lower as U.S. industrial labour action weighed on auto shares. The euro gained 0.1% to $1.0667, after slumping to a 3-1/2 month low of $1.0632 last week as the European Central Bank signalled its rate hikes could be over.

Persons: BOE, BOJ, Taiwan's TSMC, Hong, Tommy Xie, Chris Weston, Weston, Kazuo Ueda, Cash Treasuries, Stella Qiu, Shri Navaratnam, Edwina Gibbs Organizations: Federal Reserve, Bank of Japan, Nasdaq, . West Texas, Brent, Japan's Nikkei, Technology, Reuters, Trust, Greater, Greater China Research, OCBC Bank, China Evergrande, Fed, U.S ., Bank of England, Treasury, Amazon, European Central Bank, Thomson Locations: China, SYDNEY, Europe, Asia, Pacific, Japan, Zhongrong, Greater China, HK, Pepperstone, Tokyo

☆ Asian shares stumble as investors brace for central bank packed week
▼ + stars: | 2023-09-18 | by ( Stella Qiu | ) www.reuters.com time to read: +5 min

S&P 500 futures advanced 0.2% while Nasdaq futures edged 0.1% higher. Also, Chinese trust firm Zhongrong International Trust Co, with exposure to Chinese property developers, said over the weekend it was unable to make payments on some trust products on time. The euro recovered 0.1% to $1.0673 in early Asia trade, after slumping to a 3-1/2 month low of $1.0629 last week as the European Central Bank signalled its rate hikes could be over. Brent crude futures rose 0.3% at $94.20 per barrel and U.S. West Texas Intermediate crude futures were up 0.4% at $91.14. Reporting by Stella Qiu; Editing by Lincoln Feast and Shri NavaratnamOur Standards: The Thomson Reuters Trust Principles.

Persons: BOE, BOJ, Tommy Xie, Jerome Powell, Chris Weston, Weston, Kazuo Ueda, Cash Treasuries, Stella Qiu, Lincoln Organizations: SYDNEY, Federal Reserve, Bank of Japan, Nasdaq, Japan's Nikkei, China Evergrande, HK, International Trust Co, Greater, Greater China Research, OCBC Bank, U.S . Federal, Fed, U.S ., Bank of England, Treasury, Amazon, European Central Bank, Brent, . West Texas, Thomson Locations: China, Asia, Pacific, Japan, Hong Kong, Beijing, Greater China, Tokyo

☆ Morning Bid: Chips are down
▼ + stars: | 2023-09-18 | by ( ) www.reuters.com time to read: +2 min

The global chip sector is stealing the spotlight from major central banks, after the world's top contract chipmaker raised concerns over demand, hitting share prices of semiconductor stocks. In a week packed with central bank meetings, decisions are also due from the U.S. Federal Reserve on Wednesday and Bank of England on Thursday. After the European Central Bank's fireworks last week, the euro will be closely watched as a signal for whether the backlash from more hawkish ECB members is gaining any traction with traders and investors. The BOE is likely to hike interest rates for the 15th time later in the week, while the Fed seems set for a hawkish pause. One more little complication is the steady grind higher in oil prices to new highs that is stoking inflation concerns, just as central banks in most developed economies are at or approaching the end of their tightening cycles.

Persons: Vidya Ranganathan, chipmaker, There's, Kazuo Ueda, BOE, Guindos, Panetta, Sam Holmes Organizations: Vidya, Reuters, General Motors, Ford, Chrysler, International, Co, of, U.S . Federal Reserve, Bank of England, ECB, Thomson Locations: Asia, Detroit

☆ Chinese state firms' help to troubled shadow bank does little to address investor concerns
▼ + stars: | 2023-09-18 | by ( ) www.reuters.com time to read: +4 min

BEIJING, Sept 18 (Reuters) - The involvement of two Chinese state-owned financial firms in Zhongrong International Trust Co's operations and management may diffuse risk at the troubled shadow bank but does little to ease concerns about missed payments, analysts and investors said. It was not immediately clear whether the support by the two firms was engineered by the Chinese authorities, but Beijing has previously bailed out troubled financial firms by roping in state entities to contain broader contagion risk. The agreement allows the two financial firms to "provide professional services for operations and management" of Zhongrong, it said, adding the move would not impact its debt ownership and legal relationship in trust products. That would further dampen investors' confidence in trust products." "It's good news and at least provides some clarity," said Zhang, who is an investor in a Zhongrong trust product and gave only his surname due to sensitivity of the matter.

Persons: Zhongrong, They'll, Zhang, Xu, I've, Ziyi Tang, Ryan Woo, Sumeet Chatterjee Organizations: Trust, Citic Trust, CCB, Citic Group, China Construction Bank, National Financial Regulatory Administration, People's Bank of China, Citic, Shanghai, Thomson Locations: BEIJING, Beijing

The London Metal Exchange (LME) three-month copper price has been oscillating in a $7,800-8,870 per metric ton range since May as old and new price drivers compete. The gyration in net positioning is partly a reflection of copper's own choppy range-trading with many black box funds configured to react to changes in directional momentum. Money managers have lifted outright short positions on CME copper to 69,707 contracts, the largest collective bear bet on lower prices since early 2020. The net short position of 18,127 contracts is a sign the bears are in the ascendancy. The key takeaway from speculative positioning on both U.S. and London markets is that fund players are betting bigger on copper.

Persons: Ricardo Moreno, San Pedro de Barva, Juan Carlos Ulate, Long, Copper, David Evans Organizations: REUTERS, London Metal Exchange, CME, Zhongrong International, Co, Fund, Thomson, Reuters Locations: San Pedro, Costa Rica, China, Beijing, London, United States, Europe

It warned investors to be vigilant of fraud, but has not commented on the issue of missed payments to investors. Investors were afraid of “contagion” spreading to the country’s $2.9 trillion investment trust industry, Citi analysts wrote in a Wednesday research report. Last year, Zhongrong extended payments on several of its real estate trust products, saying that the companies couldn’t repay their debts. Most trust products are closed-ended, which means they can only be repaid at maturity, and hence are not vulnerable to panic selling. In addition, thanks to new regulations launched in 2017, the traditional banks have curbed their off-balance-sheet business, including trust products.

Persons: Technology —, Zhongrong, hasn’t, ”, Stringer, Zhongrong’s, China’s “ Lehman, ” Nomura, Lehman, “ Organizations: Beijing CNN, Service, KBC Corporation, Xianheng, Science, Technology, CNN, Zhongzhi, International Trust Co, Bloomberg, Getty, Investors, Citi, China, Association, Companies, Kaisa, Sunac, Nomura, Consumer, National Bureau of Statistics, People’s Bank of China Locations: Hong Kong, Beijing, China, Shanghai, Shenzhen, …, Sunac China

☆ Furious Chinese investors lodge complaints over trust firm's missed payments
▼ + stars: | 2023-08-18 | by ( ) www.reuters.com time to read: +3 min

REUTERS/Aly Song/File Photo Acquire Licensing RightsBEIJING, Aug 18 (Reuters) - Angry investors in trust products of a leading Chinese shadow bank have lodged complaint letters with regulators, pleading with the authorities to step in after the big Chinese trust firm missed payments on dozens of investment products. "Every day, a large number of people gathered at business departments of Zhongrong Trust are praying for the firm can give an explanation to investors ... investors are immersed in unlimited horror and fear every day." In the letter to the NFRA , investors demanded that Zhongrong provide reports of the underlying assets of defaulted products. "We hope officials can attach great attention to Zhongrong Trust ... and not let this to become a milestone vicious economic event," the letter sent to the NFRA said. In the letter to the CCDI, investors complained that management of Zhongrong failed to fulfill their responsibilities and caused huge losses to investors.

Persons: Aly, Zhongrong, didn't, NFRA, Ziyi Tang, Ryan Woo, Sumeet Chatterjee, Kim Cogill Organizations: REUTERS, Rights, Trust Co, Investors, Financial Regulatory Administration, Central Commission, Reuters, Zhongzhi Enterprise Group, Zhongrong, Thomson Locations: Shanghai, China, Rights BEIJING, Zhongrong

☆ China Evergrande, the world's most heavily indebted property developer, just filed for Chapter 15 bankruptcy protection
▼ + stars: | 2023-08-18 | by ( Huileng Tan | ) www.businessinsider.com time to read: +3 min

China Evergrande has filed for US Chapter 15 bankruptcy protection. Chapter 15 protects the US assets of non-US companies undergoing restructurings. Tianji Holdings, an Evergrande affiliate, also sought Chapter 15 bankruptcy protection on Thursday, per the filing. Evergrande's Chapter 15 filing mentions ongoing restructuring proceedings in Hong Kong and the Cayman Islands. Evergrande's Chapter 15 filing came amid fears of widening economic woes in China as the country's real-estate crisis emanates.

Persons: China Evergrande, —, Evergrande, China's, Jimmy Fong Organizations: US, Service, China, Tianji Holdings, Evergrande's, Hong Kong Stock Exchange, Zhongrong International, China Evergrande Group, Bankruptcy, Southern, of Locations: China, Wall, Silicon, Hong Kong, Cayman Islands, Guangzhou, of New York, Manhattan

"The application is a normal procedure for the offshore debt restructuring and does not involve (a) bankruptcy petition," it said in the filing, adding it is pushing forward with its offshore debt restructuring. Evergrande's offshore debt restructuring involves a total of $31.7 billion, which include bonds, collateral and repurchase obligations. A man walks past a No Entry traffic sign near the headquarters of China Evergrande Group in Shenzhen, Guangdong province, China September 26, 2021. China's economic and property woes and the absence of concrete stimulus steps have sent a chill through global markets. "The China property sector is like a black hole, so many developers have been dragged into it since two years ago after Evergrande," said Winner Zone Asset Management CEO and CIO Alan Luk.

Persons: Evergrande, Aly, Nomura, HSI, Alan Luk, Clare Jim, Jonathan Stempel, Dietrich Knauth, Manya, Sumeet Chatterjee, Shri Navaratnam, Kim Coghill Organizations: HONG KONG, China Evergrande, HK, U.S, Hong, British Virgin Islands, China Evergrande Group, REUTERS, Zhongrong International Trust Co, Longfor, Asset Management, Manya Saini, Thomson Locations: China, Asia, HONG, U.S, United States, Hong Kong, British Virgin, New York, Shenzhen, Guangdong province, Beijing, Bengaluru

☆ Hong Kong's benchmark stock index just closed in a bear market as China's economy wavers
▼ + stars: | 2023-08-18 | by ( Phil Rosen | ) www.businessinsider.com time to read: +2 min

Hong Kong's benchmark Hang Seng Index closed 20% lower from its most recent high on Friday. That puts it in bear market territory, with investors growing cautious on Chinese investments. China's economy is facing a troubled property market, deflation, and weak trade. Growing concerns around China's ailing economy have made investors more cautious around Chinese investments, and the index has declined 5.9% since last Friday. Most notably, however, is the unstable property market, which just saw Evergrande file for Chapter 15 bankruptcy, as well as two missed payments from developer Country Garden Holdings.

Persons: Dow Organizations: Service, Hong, HSBC, Bloomberg, Traders, Country Garden Holdings, Zhongrong, Nasdaq Locations: Wall, Silicon, Beijing

Anxious retail investors are bombarding listed companies with questions about their exposure to Zhongrong, a subsidiary of Zhongzhi, after missed payments by the trust company triggered fears of wider contagion. Zhongzhi's financial trouble is the latest challenge for Chinese authorities as they battle to contain a worsening property sector crisis and revive a faltering recovery in the world's second-largest economy. The Wednesday's meeting was held after Zhongrong International Trust Co, a leading trust company controlled by Zhongzhi, missed payments on dozens of investment products since the end of July, Reuters reported on Wednesday, citing sources. PROPERTY CRISISThe liquidity stress facing Zhongzhi highlights the ripple effect of an unprecedented debt crisis in China's property sector, which accounts for roughly a quarter of the economy that has rapidly lost momentum in recent months. Evergrande said late on Wednesday it would delay the voting date and scheme meetings with creditors for its offshore debt restructuring plan to Aug 23 and Aug 28, respectively, to give creditors more time to consider the terms.

Persons: Lehman, Morgan Stanley, Zhongzhi, Aly, Evergrande, Jason Xue, Clare Jim, Sumeet Chatterjee, Jacqueline Wong, Jamie Freed Organizations: Zhongzhi Enterprise Group, Reuters, Citigroup, Big, Workers, REUTERS, International Trust Co, Zhongrong International Trust, China Evergrande, HK, Energy Vehicle Group, Evergrande, Shanghai, Thomson Locations: SHANGHAI, HONG KONG, Beijing, China's, Zhongzhi, China, Wednesday's, Shanghai, Hong Kong

☆ Morning Bid: Rattled by the China and Fed double whammy
▼ + stars: | 2023-08-17 | by ( ) www.reuters.com time to read: +3 min

Underwhelming economic data, along with the ever-deepening property crisis, have unnerved investors and taken Asian stocks to their lowest since November. Zhongzhi Enterprise Group told investors that it was facing a liquidity crisis and will conduct a debt restructuring, two sources told Reuters. European stocks have been hamstrung too, with the pan-European STOXX 600 index (.STOXX) touching a one-month low on Wednesday and eyeing a lower open on Thursday. But it's important to remember that July's meeting came before a raft of U.S. data that underscored the resilient economy. England will face Spain on Sunday, looking to add a world title to last year's European Championship triumph.

Persons: Ankur Banerjee, Zhongzhi, Muralikumar Organizations: Silicon Valley Bank, Credit Suisse, REUTERS, Staff, Zhongzhi Enterprise Group, Reuters, International Trust Co, U.S, Federal, Traders, Australia, Reuters Graphics Reuters, Thomson Locations: Frankfurt, Silicon, Germany, Ankur, Asia, China, England, Spain, Croatia, Singapore

☆ Angry investors protested outside a Chinese shadow bank that missed payments. The rare public show of dissent point to serious trouble in China amid debt and housing distress.
▼ + stars: | 2023-08-17 | by ( Huileng Tan | ) www.businessinsider.com time to read: +3 min

Angry investors in China protested outside a shadow bank after it missed payments on investment products. This rare show of public anger points to serious trouble amid debt and housing distress in the world's second-largest economy. The protest in Beijing came after Zhongrong International missed payments on dozens of investment products since late July. Zhongrong is the ninth largest trust in China, with 600 billion Chinese yuan, or $82 billion, worth of assets under management. Both events are highly worrisome, because China's trust companies sell investment or trust products to corporate and wealthy clients.

Persons: —, Zhongrong Organizations: Bloomberg, Service, Enterprise, KPMG, Zhongrong International Trust, International Trust, Zhongrong International Locations: China, Wall, Silicon, Beijing, China's

☆ Chinese asset manager Zhongzhi says it faces a liquidity crisis, Reuters reports citing meeting video
▼ + stars: | 2023-08-17 | by ( ) www.cnbc.com time to read: +2 min

China property investment slid nearly 8% in the first half of the year, official data showed Monday, pointing to a deepening decline in investment for a sector that accounts for about a quarter of the world's second-largest economy. Zhongzhi Enterprise Group on Wednesday told investors it is facing a liquidity crisis and will conduct a debt restructuring, according to video footage of a meeting, as the Chinese asset manager grapples with a deepening property market downturn. Beijing-based Zhongzhi has hired one of the Big Four accounting firms to conduct a comprehensive audit of the firm, and is seeking strategic investors, Zhongzhi management told investors in a meeting on Wednesday, the video seen by Reuters showed. The liquidity stress facing Zhongzhi, which has sizable exposure to real estate, highlights the rippling effect of China's property debt woes. Zhongzhi is facing a "liquidity crisis" and has stopped payment to investors in its products, its management team told investors in the meeting, according to the video.

Persons: Zhongzhi Organizations: Zhongzhi Enterprise, Wednesday, grapples, Big, Reuters, International Trust Co, Anbang Insurance, HNA Group Locations: China, Beijing

☆ Country Garden: How bad is China's property crisis?
▼ + stars: | 2023-08-17 | by ( Clare Jim | ) www.reuters.com time to read: +5 min

HONG KONG, Aug 17 (Reuters) - The debt crisis at Country Garden (2007.HK), China's largest property developer before this year and once considered a financially sound company, has triggered fresh contagion fears just two years after China Evergrande Group (3333.HK) defaulted. S&P Global Rating said on Wednesday it could adjust its forecast for property sales to a "descending staircase" figure from an "L" shaped recovery, if Country Garden officially defaulted. However, it emerged when the property market and the economy are in much worse shape. Evergrande was already insolvent at the time of default, but Country Garden currently still has more assets than liabilities. Analysts warn that Country Garden could become insolvent if it had to write off large inventories, and run into negative equity if its asset values dropped over time.

Persons: Evergrande, Moody's, Lehman, Clare Jim, Sumeet Chatterjee, Stephen Coates Organizations: HK, China Evergrande, Local, Beijing, International, International Monetary, WILL, Communist Party, Thomson Locations: HONG KONG, Evergrande, China, Beijing

SHANGHAI/HONG KONG, Aug 17 (Reuters) - Faced with a liquidity crisis, Zhongzhi Enterprise Group will conduct a debt restructuring, the Chinese asset manager has told investors, as a deepening property sector downturn raises fears about spillover risks to the broader financial sector. Beijing-based Zhongzhi, which has sizable exposure to real estate, has stopped payment to investors in all investment products, its management told investors in a meeting on Wednesday, a video seen by Reuters showed. Zhongzhi's financial trouble is the latest challenge for Chinese authorities as they battle to contain a worsening property sector crisis and revive a faltering recovery in the world's second-largest economy. Zhongzhi has hired one of the Big Four accounting firms to conduct a comprehensive audit of the company, and is seeking strategic investors, its management told investors in Wednesday's meeting. Anxious retail investors are bombarding listed companies with questions about their exposure to Zhongrong after missed payments by the trust company triggered fears of contagion across the country's financial system.

Persons: Morgan Stanley, Zhongzhi, Lehman, Evergrande, Jason Xue, Clare Jim, Sumeet Chatterjee, Jacqueline Wong, Jamie Freed Organizations: Zhongzhi Enterprise, Reuters, Big, International Trust Co, Citigroup, Zhongrong International Trust, China Evergrande, HK, Energy Vehicle Group, Evergrande, Shanghai, Thomson Locations: SHANGHAI, HONG KONG, Beijing, Wednesday's, China, China's, Shanghai, Hong Kong

☆ A key Chinese shadow bank has missed payments on dozens of investments, and it shows just how bad things are in the world's second-largest economy
▼ + stars: | 2023-08-16 | by ( Huileng Tan | ) www.businessinsider.com time to read: +3 min

Zhongrong, a Chinese trust company, missed payments on dozens of investment products, per Bloomberg. The missed payments came days just after property giant Country Garden missed coupon payments. These alarming troubles at Zhongrong come just days after Country Garden, China's biggest private-sector developer by sales, missed interest payments on two US-dollar-denominated bonds. Both events are concerning because China's trust companies sell investment or trust products to corporate and wealthy clients. As of the end of 2022, China's trust sector's exposure to real estate was about 2.2 trillion yuan, or $302 billion, accounting for 10% of its total assets, per Bloomberg Economics.

Persons: Wang Qiang, —, Wang, Zhongrong doesn't, Nomura, Zhongrong Organizations: Bloomberg, Service, Zhongrong Locations: Wall, Silicon, China, Shanghai, Zhongrong

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