October 20, 2021

Analysis: Investors grappling with Evergrande fallout weigh risk of wider pain

NEW YORK, Sept 20 (Reuters) – Investors unnerved by the fallout from heavily indebted Chinese real estate company Evergrande (3333.HK) were gauging the potential for a wider shakeout after a selloff hit stocks around the world.

For now, many U.S.-based investors believe there is little chance that the woes of Evergande, China’s second-largest property developer, could morph into a systemic crisis reminiscent of the 2008 collapse of Lehman Brothers.

Still, with valuations on U.S. equities stretched on a historical basis and an unwind of the Federal Reserve’s easy money policies looming, some worry that a sudden drop in risk appetite could leave global markets vulnerable to a broader selloff.

“We have a very cautious view on the market given elevated valuation levels,” said Rob Romero, portfolio manager at Connective Capital, a technology hedge fund with $100 million in assets under…

Read full article here: www.reuters.com