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PlusMarkets Analysis • 22/09/2021
BlackRock, HSBC among largest buyers of Evergrande debt: Morningstar
Fund giant BlackRock (NYSE:BLK) and investment banks HSBC and UBS were among the largest buyers of the debt of embattled Chinese real estate developer Evergrande Inc, Morningstar data shows.
BlackRock added 31.3 million notes of Evergrande’s debt between January and August 2021, pushing its stake in the company to 1% of the assets in its $1.7 billion Asian High Yield Bond Fund, according to Morningstar.
HSBC increased its positions in the company by 40% through July, according to Morningstar. UBS increased its position by 25% through May, the latest date available in the fund tracker’s database.
None of the companies responded to requests to comment for this story.
At the same time, other large fund firms such as Fidelity, Pimco, and Allianz (DE:ALVG) cut their positions in the company by up to 47% between January and July, Morningstar said.
Growing fears that Evergrande will default on its $305 billion in liabilities has rattled global markets this week as investors worry that a downturn in the Chinese property market will spill over into the global economy.
Aussie perks up as Evergrande relief lifts investor sentiment
The Australian dollar jumped and the safe-haven yen eased slightly on Wednesday after struggling Chinese property giant Evergrande said it would make an upcoming bond coupon, allaying immediate fears about a messy corporate collapse.
Some of the excitement fizzled, however, after traders realised it was still not known whether the developer would be able to pay the coupon on its offshore dollar bonds due on Thursday.
The Australian dollar rose as much as 0.49% to $0.7268 before giving up part of the gains to trade at $0.7247, up 0.2% on the day. The yen weakened about 0.2% to 109.485 to the dollar, showing little reaction to the Bank of Japan’s decision to keep its policy on hold.
Investors are still nervous about the fate of Evergrande, which missed interest payments due Monday to at least two of its largest bank creditors, Bloomberg reported.
“The market reacted to the coupon payment news but it kind of looks like it is just out of the frying pan into the fire,” said Teppei Ino, senior strategist at MUFG Bank.
The dollar index stood at 93.226 in early Asian trade, staying not far off Monday’s one-month high of 93.455.
The euro hardly budged at $1.1725, having stabilised at a one-month low of $1.1700 on Monday.
Facebook wraps up deals with Australian media firms, TV broadcaster SBS excluded
Facebook Inc has told Australian publishers it has stopped negotiating licensing deals, an email to the industry seen by Reuters showed, a move which came just six months after the passing of a law designed to make tech giants pay for news content.
While Facebook (NASDAQ:FB) has announced deals with most of the country’s largest news outlets, some companies including TV broadcaster SBS and smaller publishers have been left out in the cold, raising questions about the scope and effectiveness of the ground-breaking law.
Australia is the only country with a law where the government may set the fees if negotiations between tech giants and news providers fail, but the rejected companies are left with little recourse for the time being and are waiting for the government to review the law in 2022 as planned.
Facebook’s regional head of news partnerships, Andrew Hunter, said in an August email to publishers it had “now concluded” deals where it would pay Australian companies for content on its just-launched “Facebook News” channel.
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