Evergrande block trades show major holder sells at 20% discount

A flurry of huge trades in China Evergrande Group Thursday instructed a big institutional holder agreed to a 20% discount to dump the stock.

Seven block trades — totaling 300 million shares — crossed earlier than the open of standard money buying and selling in Hong Kong. The orders had been all priced at HK$2.23 apiece, indicating they had been a part of the identical block settlement. That compares with Wednesday’s closing worth of HK$2.78.

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Trading in Evergrande and associated corporations has been notably energetic this week for no apparent motive, spurring hypothesis that founder Hui Ka Yan might faucet the stock market for funds. The sale might have come from the two.8 billion share pool that appeared in Hong Kong’s clearing system final week, broadly thought to belong to Hui or his spouse. It might additionally come from long-time backer Chinese Estates Holdings Ltd., which held 313.2 million shares after promoting down its stake in latest weeks.

Millions of Evergrande shares modified fingers in Hong Kong’s clearing system on Wednesday. Haitong International Securities Group Ltd.’s position was trimmed to 2.1 billion shares, down from 3.3 billion shares yesterday. Seekers Markets Ltd., which added 900 million Evergrande shares to its holdings, reported the equal of a 6.8% stake.

Hong Kong newspaper Ming Pao earlier reported an unidentified shareholder was planning to promote the shares, with out saying the place it received the data. Evergrande was up 1.1% at 11:02 a.m. in Hong Kong.

Evergrande and Chinese Estates didn’t instantly reply to a Bloomberg request for touch upon Thursday. Block trades are agreements between two events to alternate giant quantities of securities at a predetermined worth. They are sometimes damaged up into smaller orders to facilitate execution.

© 2021 Bloomberg

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