All articles tagged with #liquidity crisis
New World Development faces a critical test as it must pay $5.05 million on a dollar bond, with concerns about potential default amid its high debt levels and liquidity issues, which could impact Hong Kong's real estate market. The company is actively seeking refinancing and asset sales to manage its financial stress.
U.S. Bitcoin spot ETFs saw a record-breaking $1 billion in daily net inflows, with total net inflows reaching $11.1 billion in just two months, driving Bitcoin to new all-time highs. Analysts warn that the relentless demand for ETFs, which now hold nearly 4% of the entire BTC supply, could lead to a liquidity crisis in the Bitcoin market within six months, as available supply may not meet overwhelming demand. While ETF buying demand continues, Bitcoin exchanges have experienced stronger outflows than inflows, and data around Bitcoin miners is mixed, with some indicators suggesting selling pressure and others showing an increase in Bitcoin holdings by major miners.
The CEO of CryptoQuant predicts that Bitcoin is heading towards a sell-side liquidity crisis within the next six months due to massive accumulation by known entities like exchanges and miners, potentially leading to a new cyclical top exceeding expectations. With Bitcoin currently in the price discovery phase and trading at $71,487, the market is seen as halfway to Bitcoin euphoria, with retail on-chain activities indicating active participation but not yet signaling a cyclical top.
Byju's CEO Raveendran announced the successful disbursement of pending January salaries to employees, addressing previous reports of delayed payments due to a liquidity crisis. He attributed the delay to an "artificially induced crisis by select investors" and emphasized the company's resilience in the face of external pressures. Raveendran also highlighted the emotional toll of the challenges faced, including personal struggles and the impact on his father, while reiterating the company's commitment to overcoming the obstacles.
Chinese property giant Country Garden is facing a liquidity crisis after its apartment sales plummeted in September, leading to the company's failure to make an international debt payment. Once considered one of China's most stable property developers, Country Garden's financial struggles have raised concerns about the future of unfinished megadevelopments like Malaysia's Forest City.
Hong Kong police have arrested crypto influencer Joseph Lam, also known as "jolamchok" on Instagram, for his association with the crypto exchange JPEX. Lam's arrest comes after investigations into the liquidity crisis of JPEX, with the police raiding his office and seizing evidence. The Securities and Futures Commission of Hong Kong has blamed JPEX for promoting its services through online celebrities. Lam is accused of presenting investment schemes to a cryptocurrency chat group, convincing one victim to invest HKD 100,000. JPEX has blamed regulators and third-party market makers for the liquidity crisis and plans to recover liquidity and adjust withdrawal fees.
Chinese homebuilder Country Garden has warned that it may default on its debts after reporting a loss of $7 billion for the first half of the year. The company attributed the poor performance to the slump in the real estate market, particularly in smaller Chinese cities. Country Garden confirmed that it had missed interest payments on some of its bonds and expressed concerns about its ability to continue as a going concern. The troubled real estate giant is facing a liquidity crisis, which has raised fears of a wider impact on China's economy. In an effort to support the property sector, a major Chinese city, Guangzhou, has relaxed mortgage rules for homebuyers. Country Garden's stock has plummeted this year, and the company is under pressure to pay off its nearly $200 billion in total liabilities.
Chinese asset manager Zhongzhi Enterprise Group has informed investors that it is facing a liquidity crisis and will undergo debt restructuring, as the company grapples with the deepening property market downturn. Zhongzhi has hired a Big Four accounting firm to conduct an audit and is seeking strategic investors. The company's subsidiary, Zhongrong International Trust Co, has missed payments on numerous investment products since July. Zhongzhi's management team stated that the plan is to "self-rescue" through restructuring, focusing on debt collection and asset liquidation, but bankruptcy is also a possibility.
State-backed trust firm Zhongrong International Trust has missed principal and income payments on 140 million yuan ($19.3 million) of wealth-management products sold to three listed companies, raising concerns about liquidity problems in China's financial sector. The trust firm failed to repay 60 million yuan in principal and 4.26 million yuan of investment gains on two products due last week, while another company did not receive 30 million yuan of principal. This highlights the risk of a liquidity crisis in the financial industry beyond the property sector, as China's economic slowdown continues.
The liquidity crisis facing some small, midsize and regional banks could take years to resolve, leading to further upheaval and consolidation in the banking sector. Financial institutions face a tough environment in which to raise capital, sell off business lines or potentially merge to avoid failure. The potential for a long, slow trickle of bank failures and consolidation is made more likely if inflation persists and interest rates keep rising. Adding to the uncertainty is an expected downturn in commercial real estate valuations that could lead to writedowns and other problems.
Banks borrowed billions of dollars from the Federal Reserve this week using the Bank Term Funding Program and the discount window, as the industry faces a crisis of confidence and liquidity. The Fed eased conditions at the discount window to make it more attractive for borrowers in need of operating funds. Bridge loans were also made to now-shuttered institutions so they could meet obligations regarding depositors and other expenses. The programs ramped up the totals on the Fed balance sheet, escalating the total by some $297 billion.