[Editor Charlie sez: Dow Jones dropped 800 points during trading yesterday on news of what could be China’s Lehman Brothers financial contagion, 2008-style–Holy pangolins, Batman! Don’t believe every dead cat bounce. If you didn’t notice that 800 point drop yesterday, this analyst has some sobering news highlighting the need to index all songwriter royalties to rise with inflation.]

China’s “highly distressed” real estate companies are at risk of collapse as the country’s highly indebted developer Evergrande is on the brink of default, warns AllianceBernstein’s Jenny Zeng.

Speaking with CNBC’s “Street Signs Asia” on Friday, the co-head of Asia fixed income at AllianceBernstein warned of a “domino effect” from a potential Evergrande collapse.

“In the offshore dollar market, there is a considerable large portion of developers (who) are implied to be highly distressed,” Zeng said. These developers “can’t survive much longer” if the refinancing channel remains shut for a prolonged period, she added.