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Goldin Financial Holdings and Goldin Properties Holdings fell
more than 60 percent in Hong Kong trading at one point, wiping
about $23 billion off the value of the companies. By afternoon,
they were down 40 percent.
Their apparently inexplicable tumble follows that of Hanergy
Thin Film Power Group Ltd <0566.HK>, which on Wednesday dropped
nearly 50 percent before being halted from trading, with a
source later telling Reuters the Chinese company is under
investigation by Hong Kong's securities watchdog.
The share slides cast doubts about Hong Kong's reputation as a
global financial hub at a time of increased interest from
foreign investors following the launch of a landmark trading
link with Shanghai's stock exchange last year.
Reuters could not immediately determine any link between Hanergy
and the Goldin companies beyond the stock movements, and on
Thursday, all three companies said they were not aware of any
reason for the falls.
Hanergy's parent company, in a statement on its website, added
to the mystery surrounding the rout, saying its financials were
sound and that it had not sold any of the 30.6 billion shares it
holds in its Hong Kong-listed unit.
SEE-SAW SHARES
The Hong Kong-Shanghai stock trading link has brought in a
deluge of Chinese funds and triggered a rally in Hong Kong
stocks, but market volatility has also increased. Hanergy shares
were among the top traded on the trading link.
Goldin Financial and Hanergy had seen their values climb more
than four-fold since September, an increase at odds with more
modest gains in underlying business fundamentals, according to
an analysis of the companies' financial statements. Goldin
Property spiked almost six-fold between March and May.
The drop in Goldin's stocks on Thursday was accompanied by a
spike in trading volumes. About 26 million Goldin Properties
shares changed hands compared to up to 6 million in previous
sessions. Goldin Financial volumes leapt to over 12 million from
the past month's 2-3 million range.
Goldin Financial, which is 70 percent owned by Pan, is involved
in providing finance to small businesses secured against their
sales. It also owns vineyards in France and California.
It had a peak market value of around HK$247 billion against a
first-half net profit of HK$1.4 billion.
In March, Hong Kong's Securities and Futures Commission
cautioned investors against trading in Goldin Financial's
shares, noting that just 20 investors, including Pan, owned 98
percent of the shares.
($1 = 7.7525 Hong Kong dollars)
(Additional reporting by Umesh Desai and Charlie Zhu; Editing by
Muralikumar Anantharaman and Miral Fahmy)
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