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Goldman's Lone Hit Among Asia's Junk Flops -- China Developers

  • Goldman Sachs says only its China property picks worked out
  • Chinese developer dollar notes have returned 10.8% this year
Residential buildings stand in the Choi Hung, front, and the Tseung Kwan O district, back, of Hong Kong, China, on Tuesday, Aug. 25, 2015.
Photographer: Justin Chin/Bloomberg
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Goldman Sachs Group Inc. made nine bold Asian junk bond picks in May. The only one that came good was at the heart of the region’s market storm -- China’s property developers.

Investors who bought the bank’s five Chinese real estate picks would have earned an average 5.5 percent from May 19 through Oct. 12, a surprise considering 2015 kicked off with a landmark default by Shenzhen-based developer Kaisa Group Holdings Ltd. Goldman Sachs’ recommendation to buy non-investment grade debt of companies in India to Indonesia resulted in losses ranging from 10 to 37 percent. China property is the only speculative-grade sector in Asia that Deutsche Bank AG is telling clients to explore.