China Evergrande liquidation sends shockwaves through financial markets

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China Evergrande, China Evergrande New Energy Vehicle Group, and Evergrande Property Services was halted. The benchmark Hang Seng Index was up 1.2 percent.

Matt Simpson, Senior Market Analyst, City Index, Brisbane said, "I think the bigger surprise here is that it took so long for Evergrande to be liquidated. Clearing out the deadwood should be seen as a positive, but I doubt it will boost confidence in the property sector on this news alone." Ken Cheung, Chief Asian FX Strategist, Miuho, Hong Kong said, "The markets are still focused on the property sector downturn in China, so I think they will evaluate if this liquidation or the events (will) pose any impact on the progress to fix the property sector in China, and how the Chinese government will make any arrangement due to this kind of court case impact." Kenny NG, Securities Strategist, China Everbright securities international said, "This may further impact the confidence of mainland creditors and increase the difficulty of Evergrande's restructuring in mainland China.

At the same time, this may also affect investors' confidence in the mainland real estate industry and the willingness of mainland residents to purchase properties. This has the potential to have a dampening effect on the economy and the capital market." "Whether offshore creditors can apply for the sale of Evergrande's assets in mainland China will depend on whether the mainland courts recognise or enforce the winding-up order from Hong Kong.

If recognised or enforced, offshore creditors have a chance to claim for the assets in the mainland. Otherwise, they can only apply for the liquidation of assets in Hong Kong." Evergrande defaulted on offshore debt in late 2021, becoming a symbol of the debt