China Property Bubble To Rubble ?

04/03/2013 by

SHIMAO is always first to be hit because of ITS NAME !!

Shi Mao ? Dead Cat ?

Latest SHIMAO6.625 01/2020 at 96.60 (7.26%) about 0.75 cts cheaper today.

YuZhou ? Fish porridge ?

YUZHOU11.375 (B/B2) at 109.60 (9.15%), about a dollar lower.

Then we have CHAODA, sounding like Chao Tar (Hokkien for burnt) which is not a property name but funny enough to be included.

For funny tickers, you can’t beat China Resources with CHIBEI ? hahaah which only hokkien speaking Singaporeans would appreciate. And the new one SHTGF which could pass off as acronym for SHIT GirlFriend, standing up for Shuntak.

All I can say is that prices are holding up despite the Shanghai Stock Exchange Property Index plunging 9.1%.

Last Friday’s measures include,

(1) imposing a 20% capital gain tax on property transactions;
(2) the PBoC to raise the down payment requirement and mortgage rate in cities, where property prices have risen quickly; and
(3) extending the “local resident” requirement to cities, where property prices have increased swiftly and
(4) for cities with “local resident” requirements, such policies shall be implemented in a more restrictive way

Right now we are waiting more details from the local governments so banks are trying to send out intelligently written credit analyses suggesting to clients to switch out of high end developers like Yanlord, Greentown and Shuion into YuZhou, KWG, Caifu and Fantasia.

To me ?

Who cares ? This is not a gentlemen’s club here. When one goes, all goes.

Just look at this Shimao 11% 03/2018 chart and tell me what do you see ?

China’s Stocks Slump as Developers Tumble Most Since June 2008 (bloomberg.com)
60 Minutes’ Video Of China’s Ghost Cities Is More Surreal Than Anything We’ve Ever Seen (businessinsider.com)

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10 thoughts on “China Property Bubble To Rubble ?”

Daniel on 04/03/2013 at 10:28 PM said:

Haha

Daniel on 04/03/2013 at 10:32 PM said:

This post really crackle me up! Makes me want to fire up Bloomberg and try finding a few more of such funny names.

On a side note, what are your thoughts on buying bonds issued by non listed entities? Specifically owed by PE firms. http://www.healthscope.com.au/index.php/download_file/view/272/88/

tradehaven on 04/03/2013 at 10:50 PM said:

Hey Daniel
I just discovered I blew just about a 150k last week on a university friend’s venture.
Adios.
I also blew money in the past on start ups that are so unbelievable now that I do not believe the chap blew it on Zouk.
Non listed ? Ask the Working Cow Report chap. Because he pioneered a non listed convertible bond option structure for such deals. Anything else ? Just go with your gut.
I am not a Soros, a Buffet or a Santa here, perhaps unlike you. But I know I rather have fewer friends these days.
Chill.

Best Rgds
tradehaven on 04/03/2013 at 11:09 PM said:

And since you are of the humorous temperment… tell you an even funnier one I got today.
My ex maid insisted on going back in Dec, all out of the blue, and her husband calls up and lambasts us all for getting her preggars. As if, I knew at all.
So, I spent some precious minutes figuring out what Indo + Bangladeshi works out to be….
I came up with BINDO, but a certain HY (not high yield) chap came up with INDO-BANG !! hahahahahahaah
Hahahahah looks like we need a forum here !!
Coming soon…..

Barnes on 04/03/2013 at 10:59 PM said:

Party is over for china property. Time to take whatever profits in China as I have stated last year as the NPC meeting starts tomorrow. It’s time for serious business for the new team so expect property prices to stabilizes while infrastructure and local consumption to be boosted.

tradehaven on 05/03/2013 at 8:31 AM said:

This chap I follow just sent out short take on China.
He says SHCOMP is holding on to its 38% retracement but copper and AUD are flashing indicators of further China weakness.
And good economic news will turn out to be bad news because stimulus will be withdrawn.

JC on 04/03/2013 at 11:37 PM said:

I’m interested to see how Shui On’s bond prices are affected as a result of last Friday’s announcement. I’m in both the S$ 8.0’s and US$ 9.75%’s – despite their relatively short tenor (both mature in Q1 2015), I do not believe they will be immune to the fall-out of the latest property curb measures. I hope I’m wrong.

I’m begining to believe that the market was wise in giving Ying Li the cold shoulder in early November 2012, when (if I recall correctly) they were trying to put away relatively long tenor debt paper (no credit rating) at a patently unnattractive coupon. Standard Chartered’s managed roadshow was not well received ………….. but as I said before……… I’m getting old……… and too pessimistic (I like the acronym fun however).

Thanks again Tradehaven

tradehaven on 05/03/2013 at 8:26 AM said:

Indic prices (Yest’s close)

SHUION 6.875 13 101.25-102.75 -0.50
SHUION 7.625 15 101.75-103.25 -0.50
SHUION 9.750 15 104.50-106.00 -0.75
SHUION 10.125 — 100.00-101.50 -0.75

SHUION SGD 8% 01/2015 looks like 101.75-102.75 -1.25

Prelim analysis suggests that the certain local govts may control the presales permits to luxury properties which is the segment SHUION is in and thus dampens their outlook.

marketwatcher on 05/03/2013 at 2:53 PM said:

hi.. what do u think of this deal..seems like it was done hush hush and looks like a sweet deal to me.

http://www.businesstimes.com.sg/breaking-news/singapore/yhm-issues-s30m-convertables-fund-new-marine-businesses-20130304

tradehaven on 05/03/2013 at 6:09 PM said:

Does it sound good ?
Seems like a cheap option for the company to me. 5% free money for penny stock at discount of 40%. But it’s volatility is like 180% so highly likely to make or break by the time of maturity.
Pardon me for this primitive assessment.

Daniel on 04/03/2013 at 10:28 PM said:

Haha
Daniel on 04/03/2013 at 10:32 PM said:

This post really crackle me up! Makes me want to fire up Bloomberg and try finding a few more of such funny names.

On a side note, what are your thoughts on buying bonds issued by non listed entities? Specifically owed by PE firms. http://www.healthscope.com.au/index.php/download_file/view/272/88/
- tradehaven on 04/03/2013 at 10:50 PM said:
  
  Hey Daniel
  I just discovered I blew just about a 150k last week on a university friend’s venture.
  Adios.
  I also blew money in the past on start ups that are so unbelievable now that I do not believe the chap blew it on Zouk.
  Non listed ? Ask the Working Cow Report chap. Because he pioneered a non listed convertible bond option structure for such deals. Anything else ? Just go with your gut.
  I am not a Soros, a Buffet or a Santa here, perhaps unlike you. But I know I rather have fewer friends these days.
  Chill.
  
  Best Rgds
- tradehaven on 04/03/2013 at 11:09 PM said:
  
  And since you are of the humorous temperment… tell you an even funnier one I got today.
  My ex maid insisted on going back in Dec, all out of the blue, and her husband calls up and lambasts us all for getting her preggars. As if, I knew at all.
  So, I spent some precious minutes figuring out what Indo + Bangladeshi works out to be….
  I came up with BINDO, but a certain HY (not high yield) chap came up with INDO-BANG !! hahahahahahaah
  Hahahahah looks like we need a forum here !!
  Coming soon…..
Barnes on 04/03/2013 at 10:59 PM said:

Party is over for china property. Time to take whatever profits in China as I have stated last year as the NPC meeting starts tomorrow. It’s time for serious business for the new team so expect property prices to stabilizes while infrastructure and local consumption to be boosted.
- tradehaven on 05/03/2013 at 8:31 AM said:
  
  This chap I follow just sent out short take on China.
  He says SHCOMP is holding on to its 38% retracement but copper and AUD are flashing indicators of further China weakness.
  And good economic news will turn out to be bad news because stimulus will be withdrawn.
JC on 04/03/2013 at 11:37 PM said:

I’m interested to see how Shui On’s bond prices are affected as a result of last Friday’s announcement. I’m in both the S$ 8.0’s and US$ 9.75%’s – despite their relatively short tenor (both mature in Q1 2015), I do not believe they will be immune to the fall-out of the latest property curb measures. I hope I’m wrong.

I’m begining to believe that the market was wise in giving Ying Li the cold shoulder in early November 2012, when (if I recall correctly) they were trying to put away relatively long tenor debt paper (no credit rating) at a patently unnattractive coupon. Standard Chartered’s managed roadshow was not well received ………….. but as I said before……… I’m getting old……… and too pessimistic (I like the acronym fun however).

Thanks again Tradehaven
- tradehaven on 05/03/2013 at 8:26 AM said:
  
  Indic prices (Yest’s close)
  
  SHUION 6.875 13 101.25-102.75 -0.50
  SHUION 7.625 15 101.75-103.25 -0.50
  SHUION 9.750 15 104.50-106.00 -0.75
  SHUION 10.125 — 100.00-101.50 -0.75
  
  SHUION SGD 8% 01/2015 looks like 101.75-102.75 -1.25
  
  Prelim analysis suggests that the certain local govts may control the presales permits to luxury properties which is the segment SHUION is in and thus dampens their outlook.
marketwatcher on 05/03/2013 at 2:53 PM said:

hi.. what do u think of this deal..seems like it was done hush hush and looks like a sweet deal to me.

http://www.businesstimes.com.sg/breaking-news/singapore/yhm-issues-s30m-convertables-fund-new-marine-businesses-20130304
- tradehaven on 05/03/2013 at 6:09 PM said:
  
  Does it sound good ?
  Seems like a cheap option for the company to me. 5% free money for penny stock at discount of 40%. But it’s volatility is like 180% so highly likely to make or break by the time of maturity.
  Pardon me for this primitive assessment.

TradeHaven