The People's Bank of China added 90 billion yuan of funds on a net basis through 50 billion in seven-day and 50 billion in 14-day reverse repurchase agreements on Friday offsetting 10 billion in maturities, the biggest one-day injection since February; it marked the first time this month it added more than 10 billion yuan short-term liquidity into the banking system on a single day.
New property sales collapsed by 90%! "It's fair to say that the Evergrande situation and its repercussions on the broader property market will have a far greater direct impact on Chinese growth than any of the other regulatory crackdowns," said Alvin Tan, head of Asia foreign-exchange strategy at Royal Bank of Canada in Hong Kong.
As discussed last night, the confusion over the Evergrande is endgame has prompted China experts to game out potential worst-case scenarios - including a "Nightmare" chaotic bankruptcy one - as they contemplate how much pain the Communist Party is willing to tolerate.
Of course, in China where social stability is paramount, investors realize that they need to generate just enough disconent for Beijing to step in, and sure enough as signs of financial contagion increase and as the tens of thousands of angry protesters take to the streets to either besiege Evergrande offices or take management hostage, the pressure to intervene gets higher by the day.
Should Beijing turn a cold shoulder and should a worst case scenario materialize, numerous industries would be exposed to credit risks in a "Freefall" Evergrande default, Fitch Ratings warned.
With more than $300 billion in liabilities, Evergrande's liquidity stress is stoking worries over the broader Chinese property industry.
Both Morgan Stanley and Goldman Sachs slashed forecasts for the industry citing the potential of an Evergrande default to roil its suppliers, other developers and financial markets.
https://www.zerohedge.com/markets/china-injects-most-liquidity-february-stem-evergrande-panic
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