China’s Evergrande ordered to liquidate: A Hong Kong court ordered the liquidation of China’s second largest property developer China Evergrande Group, with more than USD 300 bn in liabilities, after the group failed to restructure following offshore debt defaults and more than two years in court. (Reuters | Bloomberg | FT)

It remains unclear what will happen next: The legal reach of Hong Kong’s ruling will be tested as most of Evergrande’s assets lie in mainland China, making them harder for liquidators to seize. “The liquidators will have very limited powers of enforcement over onshore assets in mainland China if they cannot get such recognition,” global law firm Ashurst’s Lance Jiang told Bloomberg.

China’s property market is in pretty rough shape after the country’s largest real estate developer Country Garden defaulted on a USD 15.4 mn bond payment in October.

Market reax: The Hong Kong Exchange halted trading in shares of Evergrande and its subsidiaries China Evergrande New Energy Vehicle Group and Evergrande Property Services.

Dive deeper: Bloomberg is out with a piece looking into the company’s history and China’s struggling property sector.

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THE CLOSING BELL-

The ADX fell 0.2% yesterday on turnover of AED 953.8 mn. The index is down 0.3% YTD.

In the green: Gulf Medical Projects (+7.6%), Q Holding (+5.8%) and National Bank of Umm Al Qaiwain (+5.3%).

In the red: E7 Group (-3.9%), Al Seer Marine Supplies and Equipment (-3.4%) and Umm Al Qaiwain General Investment (-3.3%).

Over on the DFM, the index closed up 0.2% on turnover of AED 242.5 mn, while the Nasdaq Dubai index fell 0.2%.

Asian markets are largely in the green this morning in early trading, but shares in Hong Kong are expected to sag at the opening bell as investors digest the liquidation of Evergrande, changes to make it more difficult to short some stocks, and the failure of Beijing to deliver a bailout package some had expected last week.

Looking to Europe: You can expect major indexes to open in the green, but the picture is mixed in New York. Futures suggest the S&P will come under pressure at the opening bell after hitting another record high, while the Nasdaq will be in the green.

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