Longfor Group loses US$2.5 billion in market cap as Hong Kong stock plunges after billionaire chairwoman resigns
- Shares in Longfor Group fell as much as 44.2 per cent on Monday, with onshore and offshore bonds also slumping, while peers such as Sunac China were also hit
- The resignation of co-founder and chairwoman Wu Yajun, who will serve as a consultant, triggered a panic sell-off
Investors dumped Chinese developer Longfor Group Holdings’s shares and bonds on Monday after co-founder Wu Yajun resigned, triggering panic sales amid mounting investor concerns about home builders considered relatively healthy.
The Hong Kong-listed company’s market capitalisation fell HK$19.6 billion (US$2.5 billion) on Monday to HK$62.81 billion, narrowing from a bigger loss earlier in the day.
Its share price slumped as much as 44.2 per cent to HK$7.32 during the morning trading session, before closing 23.8 per cent lower at HK$10. The share have lost 65.5 per cent since September 15.
Meanwhile, the company’s three onshore bonds shed at least 20 per cent, triggering trading halts. A dollar bond due in 2028 with a coupon rate of 4.5 per cent plummeted up to 18.4 cents on the dollar, according to Bloomberg.
It also dragged down bonds of several other developers. Sunac China Holdings’ 1.58 billion yuan (US$216.5 million) 6.8 per cent onshore bond slumped 35.7 per cent.
“The market sentiment is really bad and investors are scared,” said Raymond Cheng, managing director at CGS-CIMB Securities in Hong Kong. “They dumped the securities even though the company came out to declare that its liquidity has no problems.”
