Australian (ASX) Stock Market Forum

China's Evergrande Group crisis

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againsthegrain said:
The masses are starting to flood the streets, aussie construction industry is grinding to a halt, doesn't look like a good times moment
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Market is resilient though, that's why asked what this could turn into or nothing to worry here...

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No one can predict with 100% accuracy but good to listen to both sides of the argument and we are free to express our opinion here.
 
aus_trader said:
So is this China Property Developer worries more like a GFC or 1987 or some news and media BS to scare/panic the markets (i.e. storm in a teacup) that wouldn't affect Australia ?
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With regard Australia it wont be a 1987 event, from memory some of our banks nearly went under, due to the overseas borrowings being called in.
I would think the only way it will affect Australia, would be on the demand side, that is raw materials.
As far as I know the Chinese aren't undertaking many, if any, major construction builds in Australia, or stumping up the funding for any. I could be wrong, but I would have expected it to be all over the news by now, after all it would bad news, which is always good for circulation.
With raw materials it could have a dramatic effect on volumes, as a major recession in China, would have a huge effect on demand. :2twocents
 
Just to be specific, dday is actually Thursday where Evergrande has massive..probably defaulted.. payment...
Until it is just a btd or be scared moment.
We are so overdue a correction..but thos is what it is.if it crashes, i am ready with just the 2 weekly system exposure..still hurt but hey..and if it bounces well the weekly gains will make me happy
 
sptrawler said:
With regard Australia it wont be a 1987 event, from memory some of our banks nearly went under, due to the overseas borrowings being called in.
I would think the only way it will affect Australia, would be on the demand side, that is raw materials.
As far as I know the Chinese aren't undertaking many, if any, major construction builds in Australia, or stumping up the funding for any. I could be wrong, but I would have expected it to be all over the news by now, after all it would bad news, which is always good for circulation.
With raw materials it could have a dramatic effect on volumes, as a major recession in China, would have a huge effect on demand. :2twocents
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The word was 2 mths ago that China was to place a 30% export tax on steel so as to squash demand as they had more internally than they could handle. So we bought lots of steel to meet domestic demand and in anticipation.
2 mths later and no 30% tariff but a supply shortage more to do with Boxes (containers) and ship space than with under availability.

Very similar with Timber/plastic/Computer chips/Vehicals and earthmoving equipment.
 
aus_trader said:
So is this China Property Developer worries more like a GFC or 1987 or some news and media BS to scare/panic the markets (i.e. storm in a teacup) that wouldn't affect Australia ?
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Evergrande itself , probably not

the reminder of the dangers of 'off-the-plan' buying for both buyers and lenders , well that might be completely different , there must be some other fragile building companies that are smaller versions of Evergrande , still out there
 
Smurf1976 said:
Playing video games is stretching it though, and pop music is getting a bit weird as a thing for a government to crack down on.
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i'm not the least bit surprised. it's basically part of the culture. similar stuff has happened, is happening, and will happen to millions upon millions of Chinese kids everywhere (not just in China but immigrants in Aust, US etc. as well) - unsatisfactory school results means no video games and no entertainment. i should know... i was one, and that is exactly what happened to me and most of my Asian schoolmates growing up in the 90s. marks not good enough = video games taken away and locked up until academic performance improved. i wasn't really into music that much, but the kids who were had their CDs (remember those?) taken away too.

this is essentially the adult equivalent of that - i'd wager it's at least partially a response to the growing "laying flat" movement, where people have essentially given up on pursuing "success" and the associated competitive life pressures, and are instead opting to pursue happiness in minimalism. the authorities probably view it as people "lazing around and doing the bare minimum" and they don't like it as it doesn't gel with the whole growth and prosperity vision.

so just like Asian parents taking away their kids' entertainment and forcing them to do schoolwork for hours and hours every day, Asian authorities crack down on it as a heavy handed way of pushing adults towards what they would regard as more productive activities. we might see it as harmless entertainment (well not so harmless in the case of casinos) but the authorities over there probably see it as very much a harmful impediment to their vision, and hence crack down on it. i've seen news articles claiming that the government is even cracking down on social websites discussing the laying flat movement, so it would seem that they are aware of it, and this is the next step in suppressing it.
 
tech/a said:
Have mates over there with businesses in the construction industry and concur with what your seeing.
2000 wankers stuffing up 200000 genuine workmen and women.
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The powers that be used to actually plant troublemakers etc within the union ranks precisely to cause things like this.

Were they actually legit union guys or were they really working for someone else?
 
tech/a said:
DJIA futures up +300 at the moment so that cat may have some life in it yet!
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Last night had a solid rally in the last hour/into the close. This almost always precedes a bounce and futures are now WELL into the green premarket.

It was always today (tonight) that was/is the day of reckoning, not yesterday. If we were deep into the red today then it was armageddon.
 
a fair number of Australian listed REITs run at about 40% gearing , watch for more capital raising in this sector , that MIGHT be tagged on to new acquisitions ( say buy a $100 million property but raise $200 million ) so read carefully

ALSO watch for credit rating changes on the REITs ( and service companies )

i am watching to buy extra ACF but other construction related businesses could be hit by negative sentiment as well ( BKW , CSR , ABC etc )
 
I believe our RBA has issued some sort of warning regarding Evergrande as well.
I guess a dead cat needs to be dropped from lofty heights or into a deep abyss to actually get a bounce... it would really need to reach terminal velocity first. ?
 

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