Asian markets rally on easing Evergrande fears, comments

Asian markets rally on easing Evergrande fears, comments

HONG KONG: Asian markets rose yesterday as concerns about a collapse of troubled property giant Evergrande receded for now, while investors were also cheered by a Federal Reserve plan to begin scaling back its ultra-loose monetary policy soon. Hong Kong was among the lead advancers as it reopened after a midweek break to catch up with news that Evergrande had agreed a plan to repay interest to its domestic bondholders, soothing worries of a default that have raised talk of a hammer blow to the Chinese economy.

And while Wednesday’s statement was vaguely worded – not detailing how much and when it would pay – it was grasped as a much-needed positive sign. Attention is now on what it plans to do about repayments to offshore bondholders. Observers pointed out that even if it fails to meet its obligations, the firm still has 30 days to come up with the cash. However, they will be keeping an eye on how it deals with those dollar-denominated notes.

“International investors will watch closely for new developments and for any state reaction, and assess how contagious it can be for the rest of the economy,” Bernard Shaw, an Asia bond syndicate banker at Daiwa Capital