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(Bloomberg) – Sinic Holdings Group Co. has halted trading after its shares fell 87% on Monday afternoon.
The Shanghai-based developer gave no reason for stopping trading in Hong Kong. The sudden sell-off in the last two hours before the suspension was accompanied by an increase in trading volume that was about 14 times the average last year, according to data compiled by Bloomberg.
The company has a 9.5% bond of $ 246 million due Oct. 18 and Fitch Ratings revised its outlook to negative last week. Monday’s stock drop reduced its market value to just under $ 230 million, which is minimal for a listed developer in the city. An official from the company’s Hong Kong office said there was no one to answer media inquiries.
“It’s the same story as everywhere else – investors are concerned about liquidity,” said Philip Tse, director and head of real estate research in Hong Kong and China at Bocom International Holdings Co Ltd. “I think there are very likely margin calls on some of the major shareholders” looking at the development of Sinic’s stock price this afternoon.
The move comes as Hong Kong’s real estate gauge has fallen the most since May 2020 amid growing investor angst over China’s real estate crackdown and fears that Beijing could tighten its grip on the Hong Kong real estate sector. city in its “Common Prosperity” campaign.
The feeling of risk aversion in financial markets was widespread on Monday. Chinese dollar bonds rated as garbage slipped as low as 2 cents. The Hong Kong dollar fell to its lowest level this month.
(Updates with market value in third paragraph)
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