Poilievre will do 'anything to win,' must condemn Alex Jones endorsement: Trudeau
Prime Minister Justin Trudeau is ramping up his attacks on Conservative Leader Pierre Poilievre as he promotes his government's federal budget.
Persistent default fears eclipsed efforts by China Evergrande Group's chairman to lift confidence in the embattled firm on Tuesday, as Beijing showed no signs it would intervene to stem any domino effects across the global economy.
Analysts played down the threat of Evergrande's troubles becoming the country's "Lehman moment," though concerns about the spillover risks of a messy collapse of what was once China's top-selling property developer have roiled markets.
In an effort to revive battered confidence in the firm, Evergrande Chairman Hui Ka Yuan said in a letter to staff the company is confident it will "walk out of its darkest moment" and deliver property projects as pledged.
In the letter, coinciding with China's mid-autumn festival, the chairman of the debt-laden property developer, also said Evergrande will fulfill responsibilities to property buyers, investors, partners and financial institutions.
"I firmly believe that with your concerted effort and hard work, Evergrande will walk out of its darkest moment, resume full-scale constructions as soon as possible," said Hui, without elaborating how the company could achieve these objectives.
Investors in Evergrande, however, remained on edge.
Its shares fell as much as 7per cent, having tumbled 10per cent in the previous day, on fears its $305 billion in debt could trigger widespread losses in China's financial system in the event of a collapse. The stock ended down 0.4per cent.
Other property stocks such as Sunac, China's No.4 developer, and state-backed Greentown China on Tuesday recouped some of their hefty losses in the previous session. The Hong Kong property sector index rose nearly 3per cent.
"There must be negotiations behind the scenes about a systemic recapitalization (of Evergrande) by state proxies," said Andrew Collier, managing director of Hong Kong-based Orient Capital Research.
"If one piece of Evergrande's debt is allowed to default, it would trigger questions about all of their remaining debt from investors and the government doesn't want a wider crisis like that," he said.
The Chinese government has been largely quiet on the crisis at Evergrande in recent weeks.
World stocks stabilized somewhat on Tuesday and oil prices recovered from the previous day's heavy selling, as investors grew more confident that contagion from the distress of Evergrande would be limited.
However, the spillover concerns at least in the property sector remained. S&P Global Ratings downgraded Sinic Holdings to 'CCC+' on Tuesday, citing the Chinese developer's failure "to communicate a clear repayment plan."
Hong Kong-listed shares of small-sized Chinese developer Sinic plunged 87per cent on Monday, wiping $1.5 billion off its market value before trading was suspended.
A major test for Evergrande comes this week, with the firm due to pay $83.5 million in interest relating to its March 2022 bond on Thursday. It has another $47.5 million payment due on Sept. 29 for March 2024 notes.
Both bonds would default if Evergrande fails to settle the interest within 30 days of the scheduled payment dates.
"I think (Evergrande's) equity will be wiped out, the debt looks like it is in trouble and the Chinese government is going to break up this company," said Andrew Left, founder of Citron Research and one of the world’s best known short-sellers.
"But I don't think that this is going to be the straw that breaks the global economy's back," said Left, who in June 2012 published a report that said Evergrande was insolvent and had defrauded investors.
SPILLOVER RISKS
The Chinese government will help Evergrande at least get some capital, but it may have to sell some stakes to a third party, such as a state-owned enterprise, Dutch bank ING said in a research note.
"The spin-off of non-core businesses, for example, those that are not residential real estate type businesses, will probably be done first," wrote Iris Pang, ING's Chief Economist, Greater China.
"After that could come sales of stakes that are at the core of Evergrande's business," Pang said.
Citi analysts in a research note said that regulators may "buy time to digest" Evergrande's non-performing loan problem by guiding banks not to withdraw credit and extend the interest payment deadline.
Still, Citi said that while Evergrande's default crunch was a potential systemic risk to China's financial system, it was not shaping up as "China's Lehman moment."
In any default scenario, Evergrande, teetering between a messy meltdown, a managed collapse or the less likely prospect of a bailout by Beijing, will need to restructure the bonds, but analysts expect a low recovery ratio for investors.
S&P Global Ratings said in a report on Monday it does not expect Beijing to provide any direct support to Evergrande.
"We believe Beijing would only be compelled to step in if there is a far-reaching contagion causing multiple major developers to fail and posing systemic risks to the economy," the rating agency said.
"Evergrande failing alone would unlikely result in such a scenario," S&P said.
(Reporting by Svea Herbst-Bayliss, Clare Jim, Tom Westbrook, Alun John and Anshuman Daga; Writing by Megan Davies and Sumeet Chatterjee; Editing by Stephen Coates & Shri Navaratnam)
Prime Minister Justin Trudeau is ramping up his attacks on Conservative Leader Pierre Poilievre as he promotes his government's federal budget.
A Winnipeg man said a single date gone wrong led to years of criminal harassment, false arrests, stress and depression.
A Toronto couple are speaking out about their 'extremely dangerous' experience on board a sinking tour boat in the Dominican Republic last week.
The federal government has added $36.4 million to a program designed to support people who have been seriously injured or killed by vaccines since the end of 2020.
There are 63 wildfires burning in Alberta's forest protection area as of Wednesday morning and seven mutual aid fires, including one in the Municipal District of Peace.
Arrests have been made after five men were captured on video rampaging through a jewelry store in Toronto, waving weapons and smashing glass display cases.
The RCMP says a former SNC-Lavalin executive has been sentenced to three and a half years in prison in connection with a bribery scheme for a bridge repair contract in Montreal.
A new poll suggests the Liberals have not won over voters with their latest budget, though there is broad support for their plan to build millions of homes.
Appointing a trusted person to help with financial obligations can give you peace of mind. In his personal finance column for CTVNews.ca, Christopher Liew outlines the key benefits of naming a confidant to take over your financial responsibilities, if the need ever arises.
A property tax bill is perplexing a small townhouse community in Fergus, Ont.
When identical twin sisters Kim and Michelle Krezonoski were invited to compete against some of the world’s most elite female runners at last week’s Boston Marathon, they were in disbelief.
The giant stone statues guarding the Lions Gate Bridge have been dressed in custom Vancouver Canucks jerseys as the NHL playoffs get underway.
A local Oilers fan is hoping to see his team cut through the postseason, so he can cut his hair.
A family from Laval, Que. is looking for answers... and their father's body. He died on vacation in Cuba and authorities sent someone else's body back to Canada.
A former educational assistant is calling attention to the rising violence in Alberta's classrooms.
The federal government says its plan to increase taxes on capital gains is aimed at wealthy Canadians to achieve “tax fairness.”
At 6'8" and 350 pounds, there is nothing typical about UBC offensive lineman Giovanni Manu, who was born in Tonga and went to high school in Pitt Meadows.
Kevin the cat has been reunited with his family after enduring a harrowing three-day ordeal while lost at Toronto Pearson International Airport earlier this week.