China’s Evergrande chairman seeks to reassure investors, shares surge - Doo Prime News
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China’s Evergrande chairman seeks to reassure investors, shares surge

Indebted property giant China Evergrande (3333.HK) will make it a top priority to help wealth investors redeem their products, its chairman said, as investors await a key deadline for a dollar-bond coupon payment on Thursday.

Hui Ka Yan said the company was striving to ensure quality delivery of properties and stressed the importance to resume construction on developments where building had been halted.

His comments come as Evergrande, which was founded in 1996, faces mounting pressure to quell anger among homebuyers and retail investors who have sunk their money into the group’s properties or its wealth management products.

Evergrande shares, which have plunged around 85% this year, jumped as much as 32% in resumed trade on Thursday after a public holiday, marking their biggest single-day percentage rise since its listing in 2009.

The bounce was seen mainly as a reaction to Wednesday’s news that an Evergrande unit had resolved a coupon payment with creditors, although this was just one of the hurdles the company faces as it labours under a $305 billion mountain of debt.

The group’s electric vehicle (0708.HK) and property services (6666.HK) units climbed around 3% and 9%, respectively.

Full coverage: REUTERS

SoftBank-backed Oyo to file for $1.2 bln IPO next week – source

SoftBank Group (9984.T)-backed Indian hospitality startup Oyo Hotels and Rooms is expected to file for an initial public offering (IPO) next week to raise around $1 billion, a source told Reuters on Thursday.

The hotel aggregator is looking to list in India’s financial capital of Mumbai and its IPO is tentatively pegged at between $1 billion and $1.2 billion, the source said, adding it will consist of a fresh issue of shares and an offer for sale from existing shareholders.

Oyo did not immediately respond to a request for comment.

The listing plan follows a stellar debut by food delivery firm Zomato Ltd (ZOMT.NS) in July. Berkshire Hathaway Inc-backed (BRKa.N) Paytm and private equity firm TPG-backed Nykaa have also filed for IPO. Ride-hailing firm Ola, which is also backed by SoftBank (9984.T), is also set to enter markets.

Oyo, in which SoftBank owns a 46% stake and is one of its biggest bets, has endured months of layoffs, cost-cuts and losses during the global health crisis.

Its founder and Chief Executive Ritesh Agarwal had said in July that business was likely to return to levels seen before the second wave of COVID-19 infections in India and “grow from there”.

Last month, Oyo received a $5 million investment from Microsoft Corp (MSFT.O). Kotak Mahindra Capital, JP Morgan and Citi are the bankers advising Oyo on the IPO, the source said.

Full coverage: REUTERS

WORLDWIDE: FINANCE / MARKETS

Asian shares gain but Evergrande jitters keep investors on edge

Asian shares moved higher on Thursday, supported by some positive news from struggling developer China Evergrande Group (3333.HK), while the dollar held near a one-month top after the U.S. Federal Reserve took a hawkish tilt overnight.

However, investors remained on edge about Evergrande’s future, with a major test to come later on Thursday when $83.5 million in dollar-bond interest payments are due.

“It’s a long way to go yet in terms of this being resolved,” said Kerry Craig, global market strategist at JP Morgan Asset Management. “You’ll see some of the immediate fears of a huge collapse and contagion start to recede, but it will still be an issue that pops up because the property market and construction is such a massive part of the Chinese economy.”

Evergrande’s shares (3333.HK) surged 23% on Thursday after a unit said on Wednesday, when the Hong Kong market was closed for a holiday, that it had “resolved” a coupon payment on an onshore bond.

The Hong Kong benchmark (.HSI) rose 1.6%, boosting MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS), which gained 0.64%

Elsewhere, Chinese blue chips (.CSI300) gained 0.74%, Australia’s benchmark (.AXJO) rose 1.04%, and Korea’s Kospi (.KS11) fell 0.6% after returning from a three-day break to catch up with global falls earlier in the week.

U.S. stock futures, the S&P 500 e-minis , were up 0.31%.

Full coverage: REUTERS

Dollar hits one-month high as traders eye Fed rates liftoff

The dollar hit its highest in a month on Thursday and pressed the euro towards major support levels, after the Federal Reserve set the stage for rate hikes next year — far sooner than its developed market peers are expected to move.

The U.S. central bank left policy settings unchanged overnight and, as expected, did not announce the beginning of asset purchase tapering. But the Federal Reserve said “a moderation in the pace of asset purchases may soon be warranted” and Fed Chair Jerome Powell said board members believed tapering could conclude around mid-2022, opening the way for rate hikes after that. 

The dollar rose broadly after his comments, especially against the euro and yen. The U.S. yield curve flattened and Fed funds futures markets moved to price a 50% chance of a hike in October and to fully price a 25 basis point rate hike in December.

At a one-month low of $1.1684 in early Asia trade, the euro is close to its 2021 trough of $1.1664 and not far from major support at $1.1602, a break of which could open the way to falls as far as $1.14.

Liquidity was lightened by a holiday in Japan on Thursday.

“Powell didn’t give any specifics about the start of the taper, he said there was broad agreement in the end of taper, one which ‘concludes around the middle of next year,'” said John Briggs, strategist at NatWest Markets.

“This is in our view more important than when the taper starts, as it starts the clock on when the next hike may occur.”

The yen also lost ground after Powell’s news conference and ended up falling 0.5% for the session – its sharpest drop in more than three months – taking it to 109.87 per dollar, about the middle of a range it has kept since March.

The dollar index hit a one-month high of 93.526.

Full coverage: REUTERS

Oil climbs on tight supply, renewed risk appetite

Oil prices rose on Thursday, extending strong gains overnight with fuel demand growing and crude stocks declining as production remains hampered in the U.S. Gulf of Mexico after two hurricanes.

The market was also supported by a broader switch back into risk assets as concerns eased over a potential default by huge property developer China Evergrande (3333.HK) and the possible fallout on the world’s second-largest economy.

U.S. West Texas Intermediate (WTI) crude futures rose 13 cents, or 0.2%, to $72.36 a barrel at 0143 GMT, while Brent crude futures rose 17 cents, or 0.2%, to $76.36 a barrel.

Both benchmark contracts jumped 2.5% on Wednesday after data from the U.S. Energy Information Administration showed U.S. crude stocks fell by 3.5 million barrels to 414 million barrels in the week to Sept. 17, the lowest since October 2018, in a bigger drawdown than analysts had expected.

“Oil fundamentals remain constructive, particularly in the U.S.,” ING commodities strategists said in a note.

In a sign of strong fuel demand as travel bans ease, East Coast refinery utilisation rates rose to 93%, the highest rate since May 2019, EIA data showed.

ANZ Research said market sentiment is also being supported by surging natural gas prices.

“Supply shortage of gas could encourage power utilities to shift from gas to oil if winter turns out to be colder this year,” ANZ analysts said in a note.

Full coverage: REUTERS

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