Chanos Still Short China Amid Bank Buying, Says Focus on Property
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Despite recent improvement in investor sentiment (or rather, a move away from near panic) related to Chinese growth prospects, one bear isn't being swayed.
Jim Chanos, founder of hedge fund Kynikos Associates, is still bearish on China moving forward. The maintained outlook from Chanos comes as shares of the iShares FTSE/Xinhua China 25 ETF (NYSE: FXI) have rallied more than 16 percent over just the last six trading sessions.
In a Bloomberg TV interview Tuesday, Chanos said, "The fact that people are even talking about the government stepping in to shore up the banks, when two months ago people thought there was nothing wrong with the Chinese banks..." should be a good sign the situation is deteriorating.
News the state-run Central Huijin Investment will be buying into four of China's largest banks sent the MSCI China Financials index soaring recently. Through October 4th, the index was down 43 percent so far in 2011.
Amid the bank buying, Chanos said people ought to be watching China's housing market, which drives everything in China. He thinks the move by Central Huijin is more symbolic than anything else.
Central Huijin originally said it would be buying shares in September of 2008.
Chanos is still short banks and housing in China.
Jim Chanos, founder of hedge fund Kynikos Associates, is still bearish on China moving forward. The maintained outlook from Chanos comes as shares of the iShares FTSE/Xinhua China 25 ETF (NYSE: FXI) have rallied more than 16 percent over just the last six trading sessions.
In a Bloomberg TV interview Tuesday, Chanos said, "The fact that people are even talking about the government stepping in to shore up the banks, when two months ago people thought there was nothing wrong with the Chinese banks..." should be a good sign the situation is deteriorating.
News the state-run Central Huijin Investment will be buying into four of China's largest banks sent the MSCI China Financials index soaring recently. Through October 4th, the index was down 43 percent so far in 2011.
Amid the bank buying, Chanos said people ought to be watching China's housing market, which drives everything in China. He thinks the move by Central Huijin is more symbolic than anything else.
Central Huijin originally said it would be buying shares in September of 2008.
Chanos is still short banks and housing in China.
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