By Mark Lee Nov. 27 (Bloomberg) — Asian Citrus Holdings Ltd. jumped eightfold, then tumbled, on its first day of trading in Hong Kong after the city’s stock exchange published data that may have led investors to overvalue the shares. Hong Kong Exchanges & Clearing Ltd. halted trading of the stock “to maintain an orderly market,” spokesman Henry Law said by phone yesterday. Asian Citrus, China’s biggest orange plantation owner, said it wasn’t aware of reasons for the “volatility” in its shares, according to a regulatory filing to the exchange. Shareholder activist David Webb said trading information displayed by the Hong Kong exchange’s computers misled investors because the data failed to reflect a 10-for-1 split in Asian Citrus’s stock. The bourse made a “mistake” and should cancel yesterday’s transactions involving almost 12 million of the fruit producer’s shares, according to investor Brook McConnell . “It is a travesty,” said McConnell, the Hong Kong-based president of South Ocean Management Ltd., which owns Asian Citrus’s London-listed shares. “Somebody really messed up there. Nothing like this has happened.” Asian Citrus opened at HK$51.25 ($6.61) in Hong Kong yesterday, compared with the Nov. 25 closing price of 45.75 British pence (76 cents) for the London-traded shares. The stock in Hong Kong later fell to HK$19.94 when it was suspended at 11:57 a.m. local time, according to exchange data. Not Worth HK$50 Asian Citrus is “not a HK$50 stock,” South Ocean’s McConnell said. The company’s net tangible asset value per share was 37.3 yuan ($5.46) on June 30, according to its listing prospectus. By displaying this figure without noting the stock split, Hong Kong Exchange’s computers may have led investors to “think that their investment is backed by 10 times more assets than it really is,” Webb said. Asian Citrus’s prospectus, published on Nov. 23, included details about the stock split, which was completed earlier this month, the company said yesterday. It applied for its shares to resume trading in Hong Kong today. Hong Kong exchange didn’t make a mistake because its information was from Asian Citrus’s prospectus, with data as of June 30, Law said. The listing by introduction was managed by CLSA Ltd., whose spokeswoman, Mandy Ho, declined to comment. Asian Citrus is “ultimately responsible for the prospectus not being false or misleading,” Webb said. Still, the Hong Kong exchange and the Securities and Futures Commission , the city’s stock market regulator, “should have spotted the problem,” he said. To contact the reporter on this story: Mark Lee in Hong Kong at wlee37@bloomberg.net
Read the original post:
Asian Citrus Surges, Then Plunges, in Hong Kong Trading Debut `Travesty’
