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Clunie: my shorts that play the China slowdown
by Emma Dunkley on Aug 13, 2012 at 13:58
China’s GDP growth has tapered off, growing 7.6% in the second quarter versus previous rates of over 9%, and Clunie believes the country could be in for a hard landing.
In view of this, the manager has shorted companies he feels suffer from a slowdown in China.
‘Luxury goods – there is enormous demand out of China,’ said Clunie. ‘Mulberry is a luxury stock that did well in the late 1990’s. Luxury stocks do well when there’s quick wealth creation.
‘So with the correlation between China consumer spending and luxury property prices – it is a natural short.'
He added: ‘Mulberry has had a massive deceleration. Burberry has also slowed down – growth isn’t coming out as well as they’d hoped.’
Earlier this year, Mulberry shares soared to £25 and now hover at around £14. Clunie said he shorted this firm at £20 and then added to his short, in the view it was ‘massively over-priced.'
‘China residential property has been in a big bubble – transaction levels have collapsed, and China’s growth is cooling,’ added Clunie.
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