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Trade idea: Short Chinese property market on “tax debt”
Beijing-based trader Fredrik Oqvist, Founder of ChinaRAI, is looking to short the Chinese property market, after reports by China Central Television claim property developers failed to pay at least 3.8 trillion yuan in land taxes between 2005 and 2012.
He adds that besides this, the property industry is facing “more and more” challenges, as land gets more expensive, and it’s a difficult financial backdrop for the property industry to operate in.
He’s in particular looking to short Vanke, the country’s biggest developer listed on mainland exchanges, and one of the companies that owes tax, according to CCTV.
Fredrik is expecting to see a down movement in three to six months. As a result, he is looking to enter at 10.88, to place a stop at 11.50 and his target is 9.50.
A spokeswoman for Vanke said the report was based on a “misunderstanding,” which wrongly assumed the company’s provision for the tax as an immediate obligation for payment of the tax.
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01:31 minutes
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