Yikes!
Once a revered and highly influential China Evergrande Group is falling like fruit flies. They just disclosed that they had a combined loss of $81 billion in 2021 and 2022. Yes, that’s not a typo. $81 billion dollars. As you can expect, the Chairman Hui Ka Yan’s personal wealth fell from $33B in 2019 to $3B today.
The stock is down 95% today to $0.00040 from the high of $4.05 in 2017 and $3.99 in 2020.
Why am I talking about penny stocks? Because for Chinese people, a real estate market and wealth accumulation from real estate is seen as a proxy for the health of overall economy.
$MCHI (iShare MSCI China ETF) is the lowest it has ever traded within the last 5 years. The growth is slowing, financial stimuli aren’t seemed to be working and who knows how big of a contagion this real estate fiasco will create. $YINN (Direxion Daily FTSE China Bull 3x Shares) is now down 92.84% from it’s peak.
Perhaps, this will be a buying opportunity. So funds/stocks you might want to consider are
- $MCHI (iShare MSCI China ETF)
- $YINN (Direxion Daily FTSE China Bull 3x Shares)
- $FXI (iShares China Large-Cap ETF)
- $GXC (SPDR S&P China ETF)
- $BABA (down almost 60% from it’s peak)
- $JD (down almost 60% from it’s peak)
- $BIDU (high $339 and now trading $143)
Again, do your own DD before making any investment decisions. What are we doing, FYI? We are buying $YINN.