The Chinese real estate market experienced a significant downturn on Monday, following the distressing news from China Evergrande (HK:3333) Group, one of the country's leading property developers. The company abruptly canceled crucial meetings with its creditors, stating it needed to reassess its financial restructuring strategy. This unexpected development had a ripple effect across the industry, leading to a 6% drop in a Bloomberg Intelligence index tracking construction shares - the most substantial decrease since late December 2022.
China Evergrande Group was not alone in its downturn. China Aoyuan Group Ltd., another significant player in the index, also saw its shares plummet by an unprecedented 72% after resuming trading. This marked a record low for the company and significantly contributed to the overall decline of the index.
The abrupt cancellation of meetings by Evergrande and the record drop in Aoyuan's shares have sent shock waves through the Chinese real estate sector. The industry will keenly watch any further developments from these two major players and their potential impact on the broader market.
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