Bloomberg is reporting that West China Cement dropped by a record in Hong Kong in late trading after bearish bets in the stock climbed to the highest since 2012.
The shares fell by as much as % before paring their decline to 3% at the close, the most since they first traded in August 2010 and wiping out HK$2.8 billion (US$363 million) of value. Volume was more than 11 times higher than average.
Anhui Conch Cement Company agreed in November to boost its stake in the loss-making company from 21.17% to 51.6% in a HK$4.59 billion deal that is still pending approval by China’s Ministry of Commerce. West China Cement is committed to completing the acquisition and the company plans to issue a statement about the deal no later than 30 June.
Short interest as a percent of West China Cement shares outstanding climbed to 3.3% as of 24 June, more than triple the level in March.
The company reported a loss of 309 million yuan (US$46 million) last year, the steepest since 2008, in part due to plant assets write-offs and yuan depreciation. Anhui Conch’s higher credit rating would help bolster West China Cement’s ability to borrow, while a planned injection of production capacity should also boost 2017 sales volume by as much as 60% compared with 2015.
Edited from source by Joseph Green. Source: Bloomberg