Shares in China's state-owned debt collector Huarong Asset Management plummeted 50 percent on Wednesday as trading resumed in Hong Kong after a $6.6 billion state-orchestrated bailout of the embattled company.

The company's Hong Kong-traded shares were suspended in April last year after it delayed its annual report, spooking Asian markets.

When Huarong published its results in August, it revealed a record $15.9 billion loss for 2020 and outlined a rescue plan.

On Wednesday, its share price slid from HK$1.02 ($0.13) to HK$0.51 by day-end, closing 50 percent down.

The plunge follows a filing late Tuesday in which Huarong said it would return to its core business, adjust its structure, cut capital consumption and boost returns.

Business operations of the group are continuing as usual, it added.

Huarong has also completed a recapitalisation of 42 billion yuan from a group of state-backed investors, and started disposals of assets.

"The valuation achieved by the disposals will determine its capital buffer... and will be key in absorbing losses," said Fitch Ratings in a report last month.

Fitch added that "near-term asset risk at its core business and leverage will stay elevated due to its weak asset quality and business nature".

Huarong's shares plummet comes as troubled real estate giant Evergrande was labelled as being in default by a ratings firm last month after failing to make repayments on time.

Observers said a state-backed lifeline is not likely for the developer as Beijing looks to rein in excessive debt in the sector.

bys/rox/dva

China Evergrande Group

Related Links
Global Trade News

Tweet

Thanks for being here; We need your help. The SpaceDaily news network continues to grow but revenues have never been harder to maintain. With the rise of Ad Blockers, and Facebook - our traditional revenue sources via quality network advertising continues to decline. And unlike so many other news sites, we don't have a paywall - with those annoying usernames and passwords. Our news coverage takes time and effort to publish 365 days a year. If you find our news sites informative and useful then please consider becoming a regular supporter or for now make a one off contribution.
SpaceDaily Contributor $5 Billed Once credit card or paypal		SpaceDaily Monthly Supporter $5 Billed Monthly paypal only

Asian markets struggle with inflation, rates back in focus
Hong Kong (AFP) Jan 5, 2022
Markets struggled in Asia on Wednesday following a tepid lead from Wall Street, with inflation and expected interest rate hikes returning to the key focus of concerns as Omicron fears fade for now. While the new Covid variant continues to spread rapidly around the world, forcing governments to maintain containment measures, its apparently milder symptoms have allowed traders to focus more on future economic policies and plans to rein in surging prices. Later Wednesday sees the release of minutes ... read more