October 3 (Businesshala) – Hong Kong’s exposure to debt-laden developer China Evergrande Group (3333.HK) is 0.05%, or “very low” of banking assets at HK$14 billion ($1.79 billion), the South China Morning Post told Sunday, citing the city’s finance minister.
“It is very low and will not pose any systemic risk to us,” Financial Secretary Paul Chan told the newspaper, he said he had come to the conclusion after a recent audit of local banking sector exposure to the company.
Chan also said that Hong Kong’s stock market was essentially subject to some volatility amid the recent mainland crackdown on some industries, but believed any setback would be temporary.
With $305 billion in liabilities, Evergrande has raised concerns that its cash crunch could rip through China’s financial system and spread globally, a concern it raised this week to protect the interests of homebuyers. The Chinese central bank has lowered its pledge.
Evergrande has missed two bond interest payments over the past two weeks, bondholders have said, and its offshore debt, about $20 billion, trades at distressed levels.