Evergrande Stock Rises for Three Days After Successful Response to Short-seller
BEIJING, June 29, 2012 /PRNewswire-Asia/ — Sina Leju today issued a report further commenting on Evergrande real estate. On June 21, Citron released a report of 57 pages, which caused Evergrande to be involved in a short-selling disturbance. In the following 84 hours, Evergrande made a complete and continual response to Citron. Sina Leju notes that the disturbance involved the stock markets of Hong Kong and Mainland China with investment banks worldwide finally coming to the aid of Evergrande, standing behind them. Details of Sina Leju’s report follow:
After Citron released their report, Evergrande immediately released a clarification announcement and held an emergency telephone conference to respond. The next day, Evergrande also released a detailed clarification announcement to respond to Citron’s report item by item, and convened a global investor conference rapidly. The quick response and the efficient challenge acceptance of Evergrande’s management in the face of the crisis were praised by many media at home and abroad, and laid the foundation for Evergrande to get the most gain from their response.
Affected by Citron’s report, the stock price of Evergrande dropped, with the drop range of 11.4% on the same day. However, several days later, under the support of the international investment banks, Evergrande made up lost ground in the stock market rapidly, with an increase in stock price for three consecutive days. On June 25, Evergrande’s stock achieved an increase of 2.61%, successfully leading the large-scale Mainland real estate stocks; on June 26, Evergrande’s stock outperformed by virtue of an increase of 1.3%, which closed at HKD 3.98; on June 27, Evergrande’s stock achieved an increase of 1.26%, which closed at HKD 4.03.
Sina Leju’s report also notes that the potential of short-selling in international capital and the real estate industry as a whole is a dangerous prospect, with the potential to cause a domino effect and an intensive crisis in the real estate industry. As a listed company with rapid development, Evergrande got the best of their response, which accumulates good experience for Evergrande itself and other enterprises to deal with the short-selling of international capital.
SOURCE Sina Leju