Chinese authorities have sent a working group to heavily indebted developer Evergrande as it veers closer to default.
The move has been seen as a signal that Beijing will not let the troubles of the property company spill over into the rest of the market.
Shares in Evergrande, which owes around $300bn, have dropped by 20% after the company said at the end of last week that there was no guarantee it could pay the $260m of previously undisclosed debts now demanded by creditors, or the $82.5m that will become an official default today.
However, share prices for its rivals rose after the provincial government in Guangdong, where the company is based, summoned Evergrande’s founder, Hui Ka Yan, and said that it agreed to send the working group at Evergrande’s request to “oversee risk management, strengthen internal controls and maintain normal operations”.
Regulatory agencies have since made co-ordinated statements assuring the public of the stability of the market.
