Shanghai Banxia, a leading Chinese hedge fund, unwinds bet on property rebound after flagship fund sinks 9.8 per cent in May
- Shanghai Banxia Investment’s flagship Banxia Macro Fund posted its biggest monthly loss since at least 2018
- Hedge fund now expects the property sector to bottom out in the first half of next year ‘at lower price and sales levels’
A top-performing Chinese macro hedge fund has slashed its holdings in property stocks, as their declines hurt returns just two months after predicting a major rebound in the sector.
Shanghai Banxia Investment Management Center’s flagship Banxia Macro Fund slumped 9.8 per cent in May, the biggest monthly loss since at least 2018, after it sold property-related shares and cut commodities positions, according to a letter to investors that was seen by Bloomberg News.
China is considering a new basket of measures to support the property market after existing policies failed to sustain a revival, Bloomberg reported this month. The reversal by Banxia, which was among the most bullish investors in April, adds to pessimism that the ailing sector’s turnaround will take longer than many hoped.
While property sales rebounded in the first quarter, the situation worsened in April and May, dropping below a level seen in the final quarter of 2022, the firm, led by founder Li Bei, wrote in the letter.
The firm now expects the sector to bottom out in the first half of next year “at lower price and sales levels”, rather than the past quarter as previously estimated, it said in the document.
