Goldin stocks mixed after Hong Kong collapse

Two Hong Kong-listed divisions of property, finance and wine trading conglomerate Goldin were mixed on Friday, a day after plunging more than 40 percent, while analysts said city regulators' oversight had been called into question. Goldin Financial fell 3.2 percent to HK$16.92 (US$2.18) Friday at the close while Goldin Properties gained 4.88 percent to HK$15.06. Thursday's losses wiped more than $20 billion off the combined market value the two firms, which Bloomberg News said had soared more than 300 percent since January. Both companies were trading up for most of the day with Goldin Financial reaching a high of HK$18.82 and Goldin Properties reaching a high of HK$16.50. However, trade of Hanergy Thin Film Power (HTF) has still not resumed since its shares were suspended Wednesday after plunging nearly 50 percent in less than 30 minutes. A filing by Goldin Properties to the Hong Kong stock exchange late Thursday said Chinese billionaire owner Pan Sutong was considering privatising the company. "The board has been informed by Mr. Pan... that he is still considering the proposals received from the financial institutions about the possible privatisation," the company said in the filing. "There is no assurance that the possible privatisation or any other transactions relating to the shares and other securities of the company will materialise," it added. Analysts say Hong Kong regulators have been too laid back. "It gives Hong Kong regulators a black eye, they should have and could have stopped them a long time ago," market analyst Francis Lun, chief executive officer of Geo Securities, said. "It was a bubble and they did not act to burst the bubble." He added that the situation had been "exacerbated" by money flowing in as part of the Shanghai-Hong Kong Stock Connect bourse link-up. "More Chinese investors are involved and they find out Hong Kong has no daily limit," Lun said, referring to the fact that unlike most other exchanges shares can rise and fall by any amount, with no restrictions. - Lack of control - Financial analyst Jackson Wong said that the Hong Kong exchange needed to assert its authority and better explain the stocks drama. "The exchange should be able to explain a little bit more in the future why these stocks can be so volatile in one or two days in order to let people know that they are in control," Wong, the associate director for Simsen Financial Group, told AFP. But he added that in an open market with no strict rules volatility should be expected. Both analysts said the drama would not impact overall investor confidence in the city's bourse, as the highly valued stocks appeal to a niche group. Thursday's sell-off came after a 47 percent share dive in Beijing-based Hanergy, which had risen more than sixfold in the past year, making it the world's largest solar power company by market value, but prompting questions over its valuation and revenue sources. Hong Kong's Securities and Futures Commission, the city's market watchdog, said they had "no comment" and refused to say whether the companies were under investigation when contacted by AFP. Goldin's Pan had lost $11.4 billion from his personal wealth, or almost 50 percent, by the end of Thursday, according to Bloomberg Billionaires list. The two Goldin firms' interests range from property development in Hong Kong and China to vineyards in California and France.