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Hong Kong stocks are “not a casino”, the chief executive of the stock exchange said last month. Still, today’s latest huge crash – an 83 per cent slump in China Finance Investment Holdings in 20 minutes – shows the market is not for the faint-hearted.
Here’s a rundown of some of the biggest drubbings in recent years.
China Finance Investment Holdings’ sudden, unexplained fall, comes after China Huishan Dairy Holdings plunged as much as 90 per cent in a matter of minutes, wiping off $4.1bn in market capitalisation in March.
Huishan later said it was late on loan payments, that its treasurer had gone missing and its controlling shareholder had pledged 71 per cent of the company’s shares as collateral for loans.
Other companies that have seen sharp share price falls include solar equipment supplier Hanergy Thin Film Power, which plunged 47 per cent in 2015 wiping $19bn off the company’s value.
Days later, a mainland Chinese horse breeding, property and finance conglomerate saw $16bn wiped off its market capitalisation as its two Hong Kong-listed units plunged. Goldin Financial’s share price closed down 43 per cent while Goldin Properties’s share price tumbled 41 per cent.
Hong Kong’s stock market introduced circuit breakers last year, however, these only apply to the Hang Seng index’s 50 blue-chip stocks and the 81 members of the China Enterprises index.