Exchanges open week very cautious, in Hong Kong collapses giant Evergrande (-25%)

While all of Europe anxiously awaits the European list resulting from Christine Lagarde's speech, on the other side of the world, in Asia, there is new trouble for Evergrande, which is stuck in issuing new debt. And to further inflame the mood the China-EU tension over competition is back on the rise.

Starting off not great, actually below par for the European stock exchanges, Piazza Affari lost 0.2% at the start, only to recover in part due to a good start in banking stocks following the revision of the extra-profits tax. While the European namesakes, Frankfurt and Paris, lose 0.3%.

Let's take a step back by explaining the collapse of Evergrande:

Evergrande Group is a Chinese real estate firm based in the Cayman Islands, a behemoth in Greater China, registering as the second-mile seller, managing to sell apartments to people with low to middle incomes. It is a listed company in Hong Kong ad has increased its real estate value in the world. Perhaps, in Cayman, taking advantage of tax havens. The meaning of "offshore current account" is summarily that of a banking relationship opened in another jurisdiction compared to one's country of residence which very often involves those entities that are pointed out as Tax Havens, considering the "facilitated" conditions reserved at the tax. In fact, offshore charges amounting to 31.7 billion dollars including bonds, etc... were also discussed in court...

Now we can say that after the various crises heralded by the companies, it itself opens by giving up as much as 25% after the news of problems in consolidating debt restructuring. The debt hanging over the company's head amounts to $300 billion; the group itself has made it known on several occasions that it is unable to issue new debt because of a serious investigation currently still under way into Hengda Real Estate Group, one of its smaller subsidiaries.

Another real estate stock collapsed, in a chain, the China Aoyuan Group ceding about 70%, what a disastrous descent.

Surprise: Tokyo opens in green

on Asian stock exchanges, however, there is the uptick in Tokyo, where optimism about the domestic economy and expectations for the Bnak of Japan's continued accommodative monetary policy prevailed. By the end of the evening, the Nikkei index reported a 0.9% profit settling at 32,678 points, driven by the electronics and high-tech sector sputtering up for good. Also not bad was the Topix index, which ended the session up 0.39 percent at 2,385.50 points.

Waiting...

While waiting in Europe for Lagarde's speech, in my opinion the absolute detriment of the whole of Europe, and I don't say this out of bias but because of the actions carried out only to help a few nations at the expense of others; investors are looking for new indications on monetary policy and interest rates. Last week the United Kingdom and Switzerland held rates steady, the Norwegian one instead raised them by a quarter point. In the meantime there is also tension after EU chief negotiator Dombrovskis's wicked trip, warning Beijing of its intention to protect itself more vigorously from unfair competition, particularly in the very strategic electric car sector.

Will there be further uncertainty? will this political climate tend to deteriorate relations and make governments put import/export sanctions on us, or could we finally enjoy an upbeat and investment-filled 2024. Be warned that some other behemoths will surely collapse next year, due to high living costs, and take the world market with them?

Bicci