More Chinese Developers' Defaults Expected, SC Lowy CEO Says

The video discusses the challenges and uncertainties in the China dollar junk bond market, focusing on investment strategies in China properties, particularly Evergrande bonds. It highlights the liquidity issues faced by developers and the role of the government in potentially easing these pressures. The impact of the Fantasia development on bondholder priorities is examined, along with the potential for defaults and restructuring. The video concludes with a discussion on future flash points and the need for government intervention to restore market confidence.

What is a key factor in deciding whether to buy China dollar junk bonds?

• The global economic outlook

• The liquidity position of developers

• The current yield of the bonds

• The political climate in China

Why are Evergrande's problems considered deeper than those of other developers?

• They have fewer liquidity issues

• They have more government support

• They have a stronger land bank

• Their portfolio is poorer than peers

What is a major challenge for developers in the current market?

• High access to financing

• Abundant liquidity

• Low borrowing costs

• High borrowing costs

What might lead to a large wave of defaults among developers?

• Increased government funding

• Continued lack of liquidity

• Improved presale numbers

• Relaxation of market measures

What is a potential risk if authorities miscalculate their policy response?

• Higher recovery rates for bondholders

• A policy miscalculation leading to market instability

• A wave of new bond issuances

• Increased market stability

What is necessary for the offshore bond market to underwrite new bond issuances?

• Continued market shutdown

• Government inaction

• Increased borrowing costs

• Stable presale numbers

What is a sign that the market might stabilize?

• Relaxation of government measures

• Continued defaults

• Increased borrowing costs

• Decreased presale numbers