Kyle Bass’ War Against Pharmaceutical Companies Goes On While The Masses Overlook China’s Real Problem

Kyle Bass has also warned that that the Chinese banking sector will most likely experience significant losses that might hit China’s wounded economy, in an interview with CNBC’s “Squawk on the Street” earlier this week. The hedge fund manager claims that: “those that are watching whether Chinese stocks go up or down aren’t paying attention, in my opinion, to what the real problem is“, while “the real problem is the loans in this banking sector”. The Chinese banking sector has been growing exponentially over the last few years, with bank assets growing by 400% since 2007; therefore, Bass suggests that “when you run a bank expansion that aggressively, that quickly, you’re going to have some losses“. In fact, the investor considers that now is the beginning of a non-performing loans cycle in Asia. As a result, potential losses could eventually force China to use its foreign exchange reserves and raise new debt to recapitalize the banking system, according to Hayman Capital’s founder.

Let’s now take a brief look at Hayman Capital Management’s top stock picks at the end of the second quarter. Perrigo Company Public Limited Company (NYSE:PRGO) and Mylan N.V. (NASDAQ:MYL) are the investment firm’s largest holdings, while the spot of the third-largest holding was occupied by NMI Holdings Inc. (NASDAQ:NMIH). Kyle Bass’ Hayman Capital owns 5.50 million shares of the company as of June 30, accounting for 5.2% of its portfolio.

Disclosure: None