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China Evergrande has committed “two cardinal sins” which have led to the debt crisis it’s now facing — and investors are “definitely sweating,” according to one portfolio manager.
The first “sin” is that the cash-strapped property giant has borrowed too much money, says Matthews Asia’s head of fixed income, Teresa Kong. Evergrande, the world’s most indebted property developer, has over $300 billion in liabilities.
The second is that the firm has “questionable corporate governance.”
“So when you have the two together, it’s like having a really dry forest and the tinder to really ignite,” said Kong, who is also a portfolio manager.
Problems at Evergrande have escalated in recent weeks.
The…
Source cnbc.com
