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HONG KONG (AP) — Shares of debt-laden property developer China Evergrande Group soared Tuesday after they resumed trading in Hong Kong following a suspension last week.
By midday, Evergrande’s shares were up nearly 16% after jumping more than 60% early in the session.
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Evergrande is the world’s most heavily indebted real estate developer and is at the center of a property market crisis that is dragging on China’s economic growth.
The company’s stock was suspended from trading last week as it confirmed Chinese police were investigating its chairman, Hui Ka Yan, on “suspicion of illegal crimes.”
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An affiliate, Evergrande Property Services, also resumed trading Tuesday, according to a notice on the Hong Kong Stock Exchange.
However, trading of shares in China Evergrande New Energy Vehicle Group remained suspended “pending the release of an announcement in relation to inside information” of the firm, a notice to the Hong Kong exchange said. Both units halted trading last week.
China Evergrande said in a notice on last week that authorities had informed the firm that its chairman, Hui Ka Yan, had been subjected to “mandatory measures in accordance with the law due to suspicion of illegal crimes.”
Evergrande is the world’s most heavily indebted real estate developer and is at the center of a property market crisis that is dragging on China’s economic growth.
Last month, Evergrande said in a filing that it had to delay a proposed debt restructuring meeting with creditors as “sales of the group have not been as expected by the company.”
Evergrande had also said last week that it could not issue new debt as its subsidiary, Hengda Real Estate, was under investigation.
China’s property sector is an important pillar of China’s economy. It has swooned since regulators tightened rules on borrowing in the property sector in 2020. That led to Evergrande defaulting on its debt.
Last month, a former Chinese official estimated that even China’s 1.4 billion population would not be able to fill all the vacant homes across the country.
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