Shares in embattled Chinese property developer Evergrande Group came roaring back on the Hong Kong stock market Tuesday after being suspended for two days in the wake of founder and chairman Hui Ka Yan being placed under home arrest by mainland authorities. File Photo by MNXANL/Wikimedia Commons
Oct. 3 (UPI) -- Shares in the embattled Chinese property giant Evergrande Group jumped by more than 28% as trading in the stock resumed in Hong Kong Tuesday after being suspended for two days.
The stock ended the day at 5.2 cents after soaring to as high as 6 cents on the Stock Exchange of Hong Kong, up 28% from the previous close on Wednesday but still more than 98.7% below its October 2017 peak of $4.02.
The market was, however, closed for three of the five days since trading was halted, coinciding with the weekend and the National Day public holiday on Monday, marking the founding of the People's Republic of China in 1949.
Trading in Evergrande shares was suspended at the open Thursday after news emerged that the group's chairman, Hui Ka Yan was being held under "residential surveillance" by mainland authorities.
Evergrande's board was notified by authorities that Hui had been "subject to mandatory measures in accordance with the law due to suspicion of illegal crimes," the company said in a statement to HKEX on Thursday.
The company applied for permission for trade in its shares to resume in a filing to HKEX on Monday but trading in Evergrande New Energy Vehicle and futures and options of the group, which were halted until further notice due to the suspension of trading in the underlying shares, remain suspended.
Evergrande EV shares last traded at 7.2 cents on Wednesday.
The world's most indebted property developer with liabilities of $328 billion, Evergrande is at the forefront of a crisis in China's property sector triggered by the company defaulting in 2021 on $20 billion of bonds it issued overseas.
Hopes of refinancing the debt as part of a major debt restructuring plan floated in August were dashed after Evergrande announced it was unable to meet more stringent requirements demanded by regulators for the issuance of new debt.
The tighter controls were imposed after Evergrande's mainland unit, Hengda Real Estate, was placed under investigation by the China Securities Regulatory Commission.
Hengda defaulted on a scheduled payment on a $547 million bond issue last week with Evergrande blaming the default on its ability to tap debt markets to roll over the debt being scuppered by the investigation.