BEIJING — Property developer China Evergrande's debt woes are not likely to cause the same fallout as the collapse of U.S. investment bank Lehman Brothers in 2008, analysts said.
Evergrande's Hong Kong-listed shares have tumbled nearly 90% since July 2020, as the Chinese government cracked down on speculation in the real estate market.
The stock has lost more than 20% in the last five trading days and investors are watching to see if the highly indebted real estate giant will be able to make millions of dollars in interest payments on U.S. dollar-denominated bonds in the coming days. The jitters have contributed to global stock market declines this week.
However, when it comes to the scale of potential impact on international financial markets, analysts point to a major difference between the Evergrande crisis and the Lehman collapse: Evergrande holds land, while Lehman held financial assets.