Chris Shumway, head of Shumway Capital Partners LLC, recommended betting against the Chinese yuan using forward options and buying shares of Moody’s Corp.
“They have limited options within China to deal with their slowing growth,” Shumway said at the 19th annual Sohn Investment Conference in New York. “Our view is they’re growing at 6 percent and decelerating. They either need to add stimulus or the simplest way to do it is through currency depreciation.”
Shumway said an increase in ratings on European debt issuers will create revenue growth for Moody’s and there could be as much as 123 percent upside in the stock. Moody’s rose 1 percent to $79.41 at 2:06 p.m. in New York extending gains for the past 12 months to 27 percent.
Greenwich, Connecticut-based Shumway invests in public securities and private companies and has also seeded hedge funds. Shumway returned outside capital in his hedge-fund firm in 2011.