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    3333   KYG2119W1069

CHINA EVERGRANDE GROUP

(3333)
  Report
End-of-day quote. End-of-day quote Hong Kong Stock Exchange - 09/21
2.27 HKD   -0.44%
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China Evergrande : Evergrande short sellers face fee squeeze as shares slide

09/14/2021 | 06:25am EDT
FILE PHOTO: China Evergrande Centre building sign is seen in Hong Kong

HONG KONG (Reuters) - Fund managers wanting to short sell cash-strapped developer China Evergrande Group are paying unusually high fees to borrow the shares as demand to do so rockets and investors get out of long positions.

The Chinese property group said on Tuesday it had engaged advisers to examine its financial options and warned of default risks amid plunging property sales, sending its bond prices sharply lower, and its shares to a six-year low.

Short sellers sell borrowed shares in the hope of buying them back when prices fall and pocketing the difference, while other asset managers who have bought shares expecting them to rise in value are often happy to lend them in return for a fee.

Two market participants with direct knowledge of the matter said short sellers are paying fees equivalent to annualised rates of 50% or 60% to borrow Evergrande stock, which fell 11.87% to HK$2.97 a share on Tuesday.

This compares to about 2% for a company in what one described as a "moderately interesting" situation of stress and well below 1% for shares in a barely-troubled company.

"People are scraping the barrel to find shares to lend," said one of the people, both of whom declined to be named because of the sensitivity of the matter.

They said the squeeze was a result of both those wanting to place new short positions on Evergrande's shares and asset managers who had lent out their shares to short sellers now recalling them so they could sell their long positions.

Prime brokers are scrambling to borrow more Evergrande shares for hedge fund clients to maintain their short positions.

(Reporting by Alun John; Editing by Alexander Smith)

By Alun John


ę Reuters 2021
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Analyst Recommendations on CHINA EVERGRANDE GROUP
More recommendations
Financials
Sales 2021 547 B 70 284 M 70 284 M
Net income 2021 9 085 M 1 167 M 1 167 M
Net Debt 2021 353 B 45 397 M 45 397 M
P/E ratio 2021 3,31x
Yield 2021 1,67%
Capitalization 29 967 M 3 849 M 3 849 M
EV / Sales 2021 0,70x
EV / Sales 2022 0,45x
Nbr of Employees 163 119
Free-Float 15,3%
Chart CHINA EVERGRANDE GROUP
Duration : Period :
China Evergrande Group Technical Analysis Chart | MarketScreener
Full-screen chart
Technical analysis trends CHINA EVERGRANDE GROUP
Short TermMid-TermLong Term
TrendsBearishBearishBearish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus HOLD
Number of Analysts 13
Last Close Price 2,27 HKD
Average target price 11,18 HKD
Spread / Average Target 392%
EPS Revisions
Managers and Directors
Hai Jun Xia Vice Chairman & Chief Executive Officer
Shou Ming Shi President
Da Rong Pan Chief Financial Officer & Executive Director
Ka Yan Hui Chairman
Dong Feng Chen Head-Information
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