By Sherry Qin
China Evergrande Group’s shares rose sharply as trade resumed after being halted last week, following news that the property developer’s chairman was being investigated by authorities.
In an exchange filing late Monday requesting the lifting of the trading halt, Evergrande said there was no other inside information that needed to be disclosed.
Investor sentiment may been helped by the fact that Evergrande’s shares were allowed to resume trading. That “gives investors a sense that hopefully not much more bad news to come out,” said Sandra Chow, co-head of Asia-Pacific research at CreditSights.
Shares jumped 44% to 46 Hong Kong cents (6 U.S. cents) in early trade Tuesday before easing to be 16% higher at 37 Hong Kong cents.
The stock hit highs near HK$26 around mid-2020 but has been hammered in recent years by the Covid-19 pandemic and troubles in China’s property market. Most recently, shares were dragged down after the company said Chinese authorities believe Evergrande Chairman Hui Ka Yan may have committed undisclosed crimes and have subjected him to “mandatory measures” while they investigate.
The Wall Street Journal reported Sunday that authorities are investigating whether Hui attempted to transfer assets offshore while the company was struggling to complete unfinished projects.
Evergrande’s shares have been very volatile in recent weeks. They surged a record 83% on Sept. 6 after a media report that Beijing may roll out new measures to shore up the property sector. A few weeks later, the shares fell 19% on Sept. 25 after the company canceled its debt-restructuring plan.
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