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SA property stocks plunge on jitters over debt levels

Resilient leads the decline, plummeting the most on record.

South African property stocks fell the most in more than two years on speculation that some of the companies are overvalued and might be named in a negative research report that is yet to be published.

The 21-member FTSE/JSE Africa Listed Property Index plunged as much as 8.5%, the biggest drop since December 2015, before paring losses to trade 2.3% down by 11:36 am in Johannesburg on Thursday. Resilient REIT plummeted as much as 22%, a record decline, before trading 4.7% lower. Greenbay Properties, Fortress REIT -B and Nepi Rockcastle all recovered from declines of as much as 20%.

Rumors that Viceroy Research will be releasing a report on a South African property stock are fueling the losses, according to David Shapiro, deputy chairman of Sasfin Wealth in Johannesburg. Viceroy, who refers to itself as a U.S.-based short-seller, published a report highlighting some of Steinhoff International Holdings NV’s challenges shortly after the retailer announced it is investigating accounting irregularities that led to the resignation of its chief executive officer and chairman.

“Traders are taking advantage of it and plugging the market without really applying common sense,” Shapiro said. The real estate counters “are overvalued, but so is our market. We’ve got a hothouse of debt. Everyone is now panicking.”

© 2018 Bloomberg L.P

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Are these post-Steinhoff Viceroy Research rumours fake news? I think so and I think the Victory Research fellows are making a lot of money with the media’s help. First Aspen and now the property stocks. Unbelievable. What’s next?

Of even greater concern is the behavior of the investment professionals who have reacted to rumours (without the facts being known). Such big moves on the JSE are certainly not caused by Mom and Pop investors who are running scared!

Was reading the first part and wondered who did the research, it can’t be the 3 guys* at Viceroy Research could it? Yet it seems to be…

*another user here said they are 3 guys, don’t know how they’d find time for all this research.

The way these guys operate is classic, they got lucky with SHF , so the market now follows them with blinkers. They target stocks with dubious past or sketchy backrounds. then use media to accelerate any declines. Make no mistake they do this for a living, and they are very good..

Wow, all it takes is for news/rumours of Viceroy Research releasing a report for “investors” to sell; that it?!?

Whether there’s such a report or not, wouldn’t common sense dictate validating such a report before acting?

They make out that they are justice warriors. And only target companies that have something to hide. Or have been previously queried on strange accounting or business practice.

Than after building up a short position ( ) publish a report , which may or may not contain factual information.(They have a disclaimer )

The company is left to refute any statements, but in the mean time,the market panic drills the shares, and depending on the reaction by the company and the market , either press (sell more) or close out the position.

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