The financial markets have been spooked over the past few days due to the recent happenings at The Evergrande Group (OTCMKTS:EGRNF), which is the second biggest real estate firm in China. It is one of the most valuable companies in the world and has consistently been a member of the Fortune 500.
However, recently it emerged that the company was suffering from a severe liquidity crunch and hence, it was not in a position to make good on its debt related payments in a timely manner. The troubles at the company have also been reflected in its stock, which is has decline by as much as 40% over the past month.
The sheer size of the Evergrande’s operations has spooked markets in many geographies. At this point in time, the company has as many as 1300 properties in its portfolio spread across 280 cities in China. When a company of that size struggles with liquidity then it can lead to widespread panic and hence, it was perhaps no surprise that the Hang Seng Index in China fell by as much as 3.3%.
The Evergrande crisis is something that could continue to have an effect on markets all over the world in the coming days.
