Local Voices
Chris Cruse and Associates Real Estate Broker: Chinese Real Estate Billionaire Makes Big Bet About Financial System
Amid worries in China about the exposure of its financial industry and investors to bust trust products, one of the country’s richest people is making a big bet on a bank.
Hong Kong-listed Evergrande Real Estate Group, whose chairman Hui Ka Yan ranked No. 13 on the 2013 Forbes China Rich List with a fortune worth $5.4 billion, said on Friday it has spent 3.3 billion yuan, or $545 million, to buy a 4.5% stake in Beijing-based Huaxia Bank. Evergrande bought the shares on the open market at the Shanghai Stock Exchange, where Huaxia is listed, between Nov. 13 and Jan. 24, the real estate developer said in a statement after the end of trade.
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Evergrande believes “cooperation between the company and Huaxia Bank will foster the relationship” between the banking and real estate industries in China and “enhance both the property development and banking businesses of each of the parties.”
Some contrarian investment thinking and cozying up with a bank might not be a bad thing for Evergrande, whose shares have lost a quarter of their value in the past year. If the arrangement proves workable from regulatory and business points of view, other big developers could seek similar “cooperation.”
