May 21, 2015, 1:06 A.M. ET
Hanergy 2.0: Goldin, And Goldin Properties Is Unfortunately A New MSCI Stock
By Shuli Ren
Goldin Financial (530.Hong Kong) and Goldin Properties (283.Hong Kong) fell 57% and 46% in Hong Kong today after Hanergy Thin Film‘s (566.Hong Kong) spectacular 47% fall yesterday. The Goldin Group has $25 billion market cap wiped out.There, again, does not seem to have any specific reason why the Goldin names are dipping other than that there is little free float and they are popular stocks that mainland Chinese like to buy through the Shanghai Hong Kong Connect.
Financial Times pointed out that just 20 shareholders owned almost 99% of Goldin Financial’s shares and chairman Pan Sutong held 70% as of March 4.
Before this week, Goldin Properties has gained almost 4 times this year, which prompted the indexer MSCI (MSCI) to include this stock in its prestigious family of indexes. See my May 13 blog “New Members Of The MSCI Family Rally: The Shopping List“. Goldin will officially be in MSCI on May 29.
MSCI seems to run into the same problem that ETF provider Guggenheim had yesterday – although to a much less extent. Some Chinese companies have ramped up so quickly that these passive indices may run into nasty surprises. See my blog yesterday “Why Is The Guggenheim Solar ETF Slumping?” (TAN).
UPDATE: Goldin’s slump is possibly a contagion from Hanergy. Sina Finance reports that Hanergy’s chairman is “buddies” with Goldin’s boss, and Goldin Fjnancial is a consultant for Hanergy’s financial arm.