Trading in Kaisa shares were suspended earlier today, with sources saying that the firm is unlikely to have met its $400 million offshore debt deadline on Tuesday.
Similar to Evergrande's case at the start of the week, this would trigger a cross-default on the firm's offshore bond holdings - totaling to nearly $12 billion.
So far, the fallout is largely being contained thanks to the help of local authorities. Policymakers have voiced strong opinions that any adverse outcome can be easily contained. And that has helped to sooth even domestic markets somewhat.
The central and municipal governments stepping has also arguably been a reassuring factor to investors.
However, much like the case of Evergrande jitters before, it doesn't matter until it does.
For now, contagion risks are being managed. But just be mindful that this is one negative spot that could weigh on sentiment.
