EVERGRANDE - Kaisa Group Default. Concerns of Financial Abuse of WM Products & $11BN Bonds at Risk

KAISA Group is yet another Large Chinese Property Development Company that is in serious financial difficulty. The Company has DEFAULTED on a $2 BILLION WEALTH MANAGEMENT PRODUCT and its shares were suspended on the Hong Kong Stock Exchange. The company has issued over $11 BILLION in International High Yield Bonds which are now all at risk of DEFAULT and NON PAYMENT. However even more concerning is the fact that the company has raised $2 BILLION from retail investors from its Wealth Management Arm. The company is unable to repay these investments and it appears that they have mismanaged the money. Other Chinese Property development companies have also raised significant amounts through Wealth Management Products. Were these products created to enable the developers to raise capital for their projects? Is this a major financial mismanagement and is this similar to the CDO/CLO scandal that caused the Global Financial Crisis in 2008?

In this video we discuss the background of Kaisa Group and look at the events that lead up to the DEFAULT. We also discuss the IMPLICATIONS for the PROPERTY MARKET, THE ECONOMY and the potential CONTAGION that this could cause for other property developers in both China and the Rest of the World.

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Chapters:
0:00 Intro
1:59 Kaisa Group
4:16 Papyment default & Suspension of Shares
5:03 Wealth Management Business
7:07 Wealth Management Restructuring & Market Fallout
9:34 Could This Trigger Another Global Financial Crisis?
10:20 Kaisa’s High Yield Bonds
11:58 Disposal Plans
13:30 Summary & Market Outlook