Hong Kong company Goldin sees $23 billion wiped off share price

Hong Kong’s best-performing stocks this year are tumbling even faster than they rallied.

Goldin Financial Holdings and Goldin Properties Holdings, controlled by billionaire Pan Sutong, plunged more than 60 per cent in Hong Kong trading Thursday, wiping about $23 billion off the value of the companies. There was no immediate explanation for the drop.

Before the rout, the two stocks surged more than 300 per cent in 2015 for the biggest gains on the Hang Seng Composite Index.

The tumble follows the mysterious 47 per cent plunge in 24 minutes by Hanergy Thin Film Power Group on Wednesday, which erased $19 billion in market value before trading was suspended.

The companies have other similarities.

Hanergy is also controlled by single billionaire owner - Li Hejun. Almost no analysts tracked Goldin Financial or Hanergy even as their market values swelled to more than $30 billion, making them among Hong Kong’s biggest listed companies, while doubts over the sustainability of the rallies increased.

“It’s a contagion effect,” said Nick Cheng, chief derivatives trader at Liquid Capital Markets in Hong Kong.

Investors “are now rushing to take profit and everyone’s suddenly running for the exit,” he said. The volatility “will damage investor confidence with such a reputable stock exchange.”

Bloomberg