China Evergrande Group (OTCMKTS:EGRNF) was up 25%. Last week global markets tumbled following news that Chinese developers were facing a fallout of lack of liquidity. However, reports say the storm could soon pass with external players stepping in to address the crisis, which is welcome news for those holding EGRNF.
China’s central banks are expected to boost Evergrande’s liquidity, which could stabilize the risk assets most affected by the Evergrande situation. Also, the near-term cash boost will lend credibility to a statement issued by Evergrande indicating that it had “negotiated a resolution” for the settling of a $35.9 million payment with a foreign bondholder.
The news comes before the company faces another coupon payment of $83.5 million on its dollar-denominated bonds. Although the company has not issued a statement regarding when the payment will be expected or if it will pay, the ability to resolve a single debt provides optimism to investors. So, investors should keep an eye on EGRNF.
Market Reaction:
On Wednesday, EGRNF stock soared 25% at $0.40 with more than 3.88 million shares, compared to its average volume of 90k shares. The stock has moved within a range of $0.3990 – 0.4500 after opening the trade at $0.4252.
