29-05-2017, 04:52 PM
China Evergrande Group’s astonishing share rally has resulted in the world’s most painful short trade this year. To add insult to injury, bearish investors are paying higher fees to get crushed.
Fees to borrow shares of the Hong Kong-listed Chinese developer for shorting have surged by more than five times since January to about 10 percent and have doubled since Evergrande started buying back shares in late March, according to Simon Colvin, a London-based analyst at IHS Markit Ltd. Evergrande shares available for lending have “nearly all been spoken for,” Colvin wrote in an email, resulting in higher borrowing costs.
Evergrande shares have more than tripled this year, hurting short-sellers and baffling even some of the most bullish stock analysts. Part of the sharp rally can be explained by Evergrande’s plan to raise money from strategic investors ahead of a planned backdoor listing on the mainland and speculation that the developer will benefit from rising home sales in smaller Chinese cities. A buyback spree has also propelled a 123 percent jump since late March -- when short interest started climbing from a low point.
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https://www.bloomberg.com/news/articles/...ande-bears
Evergrande, Fosun and HNA are enigmas of where their money comes from
Fees to borrow shares of the Hong Kong-listed Chinese developer for shorting have surged by more than five times since January to about 10 percent and have doubled since Evergrande started buying back shares in late March, according to Simon Colvin, a London-based analyst at IHS Markit Ltd. Evergrande shares available for lending have “nearly all been spoken for,” Colvin wrote in an email, resulting in higher borrowing costs.
Evergrande shares have more than tripled this year, hurting short-sellers and baffling even some of the most bullish stock analysts. Part of the sharp rally can be explained by Evergrande’s plan to raise money from strategic investors ahead of a planned backdoor listing on the mainland and speculation that the developer will benefit from rising home sales in smaller Chinese cities. A buyback spree has also propelled a 123 percent jump since late March -- when short interest started climbing from a low point.
-snip-
https://www.bloomberg.com/news/articles/...ande-bears
Evergrande, Fosun and HNA are enigmas of where their money comes from