{"id":139862,"date":"2021-09-26T23:48:21","date_gmt":"2021-09-26T23:48:21","guid":{"rendered":"https:\/\/precoinnews.com\/?p=139862"},"modified":"2021-09-26T23:48:21","modified_gmt":"2021-09-26T23:48:21","slug":"the-evergrande-crisis-may-just-be-a-tempest-in-a-teapot-says-analyst","status":"publish","type":"post","link":"https:\/\/precoinnews.com\/business\/the-evergrande-crisis-may-just-be-a-tempest-in-a-teapot-says-analyst\/","title":{"rendered":"The Evergrande crisis may just be a \u2018tempest in a teapot,\u2019 says analyst"},"content":{"rendered":"<ul>\n<li>Embattled developer China Evergrande&#x27;s situation is not a surprise given the steps taken by Beijing to reign in excessive debt in the property sector, according to Orient Capital Research&#x27;s Andrew Collier.<\/li>\n<li>The ongoing crisis surrounding debt-ridden Chinese developer Evergrande has captured global investor attention for much of this week.<\/li>\n<li>Collier said there were two reasons why the global markets are worried about Evergrande&#x27;s troubles.<\/li>\n<\/ul>\n<p>Embattled developer China Evergrande&#x27;s situation is not a surprise, given the steps taken by Beijing to reign in excessive debt in the property sector, according to Orient Capital Research&#x27;s Andrew Collier.<\/p>\n<p>&quot;This is all a bit of a tempest in a teapot, which sounds funny given that the whole world is worried about Evergrande right now,&quot; Collier, managing director at the research firm, told CNBC&#x27;s &quot;Street Signs Asia&quot; on Thursday.<\/p>\n<p>Collier pointed to Beijing&#x27;s &quot;three red lines&quot; policy introduced last year, which was aimed at preventing developers from loading up on debt as well as to deflate the property bubble.<\/p>\n<p>&quot;The end result is one of the largest companies and the most indebted is not surprisingly, in trouble,&quot; he said, referring to Evergrande.<\/p>\n<p> &quot;The fact that they&#x27;re continuing \u2026 to force developers to try to deleverage is an indication that they think this is a good campaign,&quot; Collier added.<\/p>\n<p>The Chinese authorities&#x27; rationale for such an action is &quot;pretty obvious,&quot; he explained. &quot;They figure that if they don&#x27;t do this, then they&#x27;re going to have an even bigger crisis on their hands and the entire property market goes into a bubble territory more than it is, and then collapses.&quot;<\/p>\n<p>The ongoing crisis surrounding debt-ridden Chinese developer Evergrande has captured global investor attention for much of this week, and rattled markets. <\/p>\n<p>Hong Kong&#x27;s Hang Seng index fell nearly 3% this week, while major indexes on Wall Street also tumbled amid the risk-off sentiment \u2014 although they staged a relief rally later in the week. <\/p>\n<h3>Loading chart&#8230;<\/h3>\n<p>If Beijing so desires, it can actually &quot;release the brakes&quot; and ask state proxies such as regional banks to step in and recapitalize Evergrande, Collier said. <\/p>\n<p>Still, he sees authorities as &quot;likely to inflict some pain&quot; on investors to send a clear message that they&#x27;re tired of excess in the property sector.<\/p>\n<h2>Why global markets are nervous<\/h2>\n<p>Collier said there were two reasons why global markets are worried about Evergrande&#x27;s troubles.<\/p>\n<p>First, the global financial crisis in 2008 was property-related, he explained. It was sparked by a U.S. housing bubble more than a decade ago. Lehman Brothers, the world&#x27;s fourth-largest investment bank at that time, underwrote tens of billions of dollars&#x27; worth of securities backed by risky mortgages during a U.S. housing bubble. <\/p>\n<p>The bank eventually collapsed, having filed the largest corporate bankruptcy in U.S. history. That bankruptcy spilled over to other banks, triggering the global financial crisis.<\/p>\n<p>Still, the current situation in China is different from that 2008 crisis, according to the analyst: &quot;They have direct loans to developers that are problematic, but they don&#x27;t have a whole bunch of capital sitting around with a bunch of traders &#8230; making up bad securities.&quot;<\/p>\n<h2>Stock picks and investing trends from CNBC Pro:<\/h2>\n<p>Goldman picks 9 semiconductor stocks to pop on new &#x27;extreme ultraviolet&#x27; trend<\/p>\n<p>Deciphering what the Fed did this week, what it will do next and what that means for markets<\/p>\n<p>\u2018High growth, low risk, high quality\u2019: Bank of America backs these global stocks<\/p>\n<p>Furthermore, the Chinese authorities also have &quot;ways of manipulating the banking system.&quot;<\/p>\n<p>That could come in the form of indirect cash injections from the People&#x27;s Bank of China to the banks, or through forcing state proxies to step in and aid Evergrande, which the analyst said is &quot;probably what&#x27;s going to happen.&quot;<\/p>\n<p>The other area of concern for investors is the importance of China&#x27;s property market to its overall economy,as well as the fiscal health of local governments, Collier said. <\/p>\n<p>That means that a crisis in the property sector will translate into problems within the Chinese economy, causing an impact on areas such as global iron ore prices and consumption of goods.<\/p>\n<p>Source: <a href=\"https:\/\/www.cnbc.com\/2021\/09\/24\/orient-capital-research-on-evergrande-debt-crisis-investor-worries.html\" target=\"_blank\" rel=\"noopener\">Read Full Article<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Embattled developer China Evergrande&#x27;s situation is not<\/p>\n","protected":false},"author":3,"featured_media":139861,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[23051],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.7 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>The Evergrande crisis may just be a \u2018tempest in a teapot,\u2019 says analyst - Pre Coin News<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/precoinnews.com\/business\/the-evergrande-crisis-may-just-be-a-tempest-in-a-teapot-says-analyst\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The Evergrande crisis may just be a \u2018tempest in a teapot,\u2019 says analyst - Pre Coin News\" \/>\n<meta property=\"og:description\" content=\"Embattled developer China Evergrande&#x27;s situation is not\" \/>\n<meta property=\"og:url\" content=\"https:\/\/precoinnews.com\/business\/the-evergrande-crisis-may-just-be-a-tempest-in-a-teapot-says-analyst\/\" \/>\n<meta property=\"og:site_name\" content=\"Pre Coin News\" \/>\n<meta property=\"article:published_time\" content=\"2021-09-26T23:48:21+00:00\" \/>\n<meta name=\"author\" content=\"mediabest\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:image\" content=\"https:\/\/precoinnews.com\/wp-content\/uploads\/2021\/09\/The-Evergrande-crisis-may-just-be-a-\u2018tempest-in-a-teapot-says-analyst.jpg\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"mediabest\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/precoinnews.com\/business\/the-evergrande-crisis-may-just-be-a-tempest-in-a-teapot-says-analyst\/\",\"url\":\"https:\/\/precoinnews.com\/business\/the-evergrande-crisis-may-just-be-a-tempest-in-a-teapot-says-analyst\/\",\"name\":\"The Evergrande crisis may just be a \u2018tempest in a teapot,\u2019 says analyst - Pre Coin News\",\"isPartOf\":{\"@id\":\"https:\/\/precoinnews.com\/#website\"},\"datePublished\":\"2021-09-26T23:48:21+00:00\",\"dateModified\":\"2021-09-26T23:48:21+00:00\",\"author\":{\"@id\":\"https:\/\/precoinnews.com\/#\/schema\/person\/ad0e9920e03d3b41c7ad02a18375d76a\"},\"breadcrumb\":{\"@id\":\"https:\/\/precoinnews.com\/business\/the-evergrande-crisis-may-just-be-a-tempest-in-a-teapot-says-analyst\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/precoinnews.com\/business\/the-evergrande-crisis-may-just-be-a-tempest-in-a-teapot-says-analyst\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/precoinnews.com\/business\/the-evergrande-crisis-may-just-be-a-tempest-in-a-teapot-says-analyst\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/precoinnews.com\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Business\",\"item\":\"https:\/\/precoinnews.com\/category\/business\/\"},{\"@type\":\"ListItem\",\"position\":3,\"name\":\"The Evergrande crisis may just be a \u2018tempest in a teapot,\u2019 says analyst\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/precoinnews.com\/#website\",\"url\":\"https:\/\/precoinnews.com\/\",\"name\":\"Pre Coin News\",\"description\":\"precoinnews.com\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/precoinnews.com\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/precoinnews.com\/#\/schema\/person\/ad0e9920e03d3b41c7ad02a18375d76a\",\"name\":\"mediabest\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/precoinnews.com\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/f5f13cb3b94fc348d515c0951f6ca073?s=96&d=mm&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/f5f13cb3b94fc348d515c0951f6ca073?s=96&d=mm&r=g\",\"caption\":\"mediabest\"}}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"The Evergrande crisis may just be a \u2018tempest in a teapot,\u2019 says analyst - Pre Coin News","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/precoinnews.com\/business\/the-evergrande-crisis-may-just-be-a-tempest-in-a-teapot-says-analyst\/","og_locale":"en_US","og_type":"article","og_title":"The Evergrande crisis may just be a \u2018tempest in a teapot,\u2019 says analyst - Pre Coin News","og_description":"Embattled developer China Evergrande&#x27;s situation is not","og_url":"https:\/\/precoinnews.com\/business\/the-evergrande-crisis-may-just-be-a-tempest-in-a-teapot-says-analyst\/","og_site_name":"Pre Coin News","article_published_time":"2021-09-26T23:48:21+00:00","author":"mediabest","twitter_card":"summary_large_image","twitter_image":"https:\/\/precoinnews.com\/wp-content\/uploads\/2021\/09\/The-Evergrande-crisis-may-just-be-a-\u2018tempest-in-a-teapot-says-analyst.jpg","twitter_misc":{"Written by":"mediabest","Est. reading time":"4 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/precoinnews.com\/business\/the-evergrande-crisis-may-just-be-a-tempest-in-a-teapot-says-analyst\/","url":"https:\/\/precoinnews.com\/business\/the-evergrande-crisis-may-just-be-a-tempest-in-a-teapot-says-analyst\/","name":"The Evergrande crisis may just be a \u2018tempest in a teapot,\u2019 says analyst - Pre Coin News","isPartOf":{"@id":"https:\/\/precoinnews.com\/#website"},"datePublished":"2021-09-26T23:48:21+00:00","dateModified":"2021-09-26T23:48:21+00:00","author":{"@id":"https:\/\/precoinnews.com\/#\/schema\/person\/ad0e9920e03d3b41c7ad02a18375d76a"},"breadcrumb":{"@id":"https:\/\/precoinnews.com\/business\/the-evergrande-crisis-may-just-be-a-tempest-in-a-teapot-says-analyst\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/precoinnews.com\/business\/the-evergrande-crisis-may-just-be-a-tempest-in-a-teapot-says-analyst\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/precoinnews.com\/business\/the-evergrande-crisis-may-just-be-a-tempest-in-a-teapot-says-analyst\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/precoinnews.com\/"},{"@type":"ListItem","position":2,"name":"Business","item":"https:\/\/precoinnews.com\/category\/business\/"},{"@type":"ListItem","position":3,"name":"The Evergrande crisis may just be a \u2018tempest in a teapot,\u2019 says analyst"}]},{"@type":"WebSite","@id":"https:\/\/precoinnews.com\/#website","url":"https:\/\/precoinnews.com\/","name":"Pre Coin News","description":"precoinnews.com","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/precoinnews.com\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/precoinnews.com\/#\/schema\/person\/ad0e9920e03d3b41c7ad02a18375d76a","name":"mediabest","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/precoinnews.com\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/f5f13cb3b94fc348d515c0951f6ca073?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/f5f13cb3b94fc348d515c0951f6ca073?s=96&d=mm&r=g","caption":"mediabest"}}]}},"_links":{"self":[{"href":"https:\/\/precoinnews.com\/wp-json\/wp\/v2\/posts\/139862"}],"collection":[{"href":"https:\/\/precoinnews.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/precoinnews.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/precoinnews.com\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/precoinnews.com\/wp-json\/wp\/v2\/comments?post=139862"}],"version-history":[{"count":0,"href":"https:\/\/precoinnews.com\/wp-json\/wp\/v2\/posts\/139862\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/precoinnews.com\/wp-json\/wp\/v2\/media\/139861"}],"wp:attachment":[{"href":"https:\/\/precoinnews.com\/wp-json\/wp\/v2\/media?parent=139862"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/precoinnews.com\/wp-json\/wp\/v2\/categories?post=139862"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/precoinnews.com\/wp-json\/wp\/v2\/tags?post=139862"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}