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Shares in China’s biggest bad loan manager have recovered about half of Tuesday’s steep fall that was triggered by a short seller’s report slamming a property developer in which the company holds a stake.
Mainland property developer Fullshare Holdings came under fire from Glaucus Research on Tuesday, when the California-based short seller issued a report raising questions about its share price trading patterns, valuation and asset disposals.
Fullshare requested, and was granted, a trading halt from the Hong Kong Stock Exchange but not before its shares had fallen by 11.9 per cent. The company issued a statement late on Tuesday evening saying Glaucus’s report “contains misleading statements and unfounded speculation” and said it was “preparing an announcement in response to the allegations”.
China Huarong Asset Management, the mainland’s biggest bad loan manager, held a 13.4 per cent stake in Fullshare, according to a filing to the HKEx dated April 6.
Shares in Hong Kong-listed China Huarong were up 4.9 per cent on Wednesday and on track for their biggest one-day advance since late December. Yesterday, its shares closed lower by 9.3 per cent, its biggest drop since its October 2015 initial public offering.
China Huarong has not issued any subsequent statement to the HKEx.