Shimao collapses on the stock market, the crisis in the Chinese real estate market continues

The stock market of Hong Kong was the protagonist of an almost unprecedented historical event, with the actions Of Shimao Property Holdings Ltd which I am collapse drastically after the Chinese real estate giant announced that it is being liquidated by China Construction Bank, one of the country's largest state-owned banks. The Chinese real estate market therefore, it continues to be in great difficulty, after other great actors too, we read Evergrande And Country garden, were victims of crashes and financial problems. The situation also worries the Beijing government quite a bit, as it is reportedly working on substantial interventions to alleviate the impact of the real estate crisis on the world's second largest economy.

The collapse of Shimao shares

Shimao is a one of the real estate developers more important than China. Listed on the Hong Kong Stock Exchange since 2006, it saw the value of its shares collapse after receiving a grant from the China Construction Bank liquidation request. The institute, more specifically, has submitted a request to the High Court of Hong Kong relating to a financial obligation of Shimao amounting to approximately 1,579.5 million dollars of Hong Kong (approximately 201 million US dollars or 185 million euros). The news, made public by the real estate giant in recent days, caused the collapse of the stock on the stock exchange by 14 percent, making it reach an all-time low of $0.39 of Hong Kong per share (0.05 euros). The first hearing for the Chinese real estate group is set for June 26th, with the company continuing to lose a lot of value and money on the stock market.

The crisis in the Chinese real estate market

The case of Shimao confirms the profound real estate crisis in China, with investors deciding to direct their capital elsewhere. All this takes place in a scenario of general economic slowdown in China, with the situation which could therefore worsen even further, involving other sectors as well.

Other cases of crisis in the Chinese real estate sector

The crisis of Chinese real estate market it is easily understood by looking at what is happening in many companies that, until recently, had achieved a leadership position in the sector. In January 2024, the Hong Kong court ordered the liquidation of the company Evergrande Real Estate, China's second-biggest seller, after offshore debt settlement negotiations failed to yield the desired results. The same company had declared in August 2023 bankruptcy, with a debt of 300 billion dollars and had asked the New York bankruptcy court for the application of chapter 15 of the US bankruptcy code, relating to the protection of creditors. Around the same time, a similar fate had befallen China's largest private real estate developer, Country Gardenfor which a request had been made liquidation by a creditor for failure to repay a loan worth 1.6 billion Hong Kong dollars (about 205 million US dollars). Active mainly in the Chinese domestic market, before the crisis Country Garden had sold around 1.5 million homes and had around 124 thousand employees worldwide.