We mentioned it in our morning market wrap, but in case you missed it, ratings agency S&P slashed its rating on various Chinese property developers, presumably feeding right into Chanos’ short.Via AFP, here’s the essence of the move:
“Meaningful price adjustments” in the world’s second-largest economy were expected in the second half of 2011 as “policy tightening starts to bite” and sales slow, S&P credit analyst Bei Fu said in a note.”Any meaningful slippage in sales will significantly weaken the developers’ cash flow protection measures amid higher leverage and stiff competition.”
For a look at some major developers in the area, and how they’ve performed, see here.
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