(Adds context, SFC comment on share performance)
HONG KONG, June 8 (Reuters) - Hong Kong’s securities regulator urged investors to exercise “extreme caution” in trading Goldin Properties Holdings Limited because the majority of the stock is held by a small group of investors, making it very volatile.
The notice from the Securities and Futures Commission (SFC) follows a warning late last month that urged investors to stay away from companies whose valuations bear little resemblance to their underlying business.
It also comes weeks after filings linked Goldin’s sister company, Goldin Financial Holdings, to China-based Hanergy Thin Film Power Group Ltd, another large Hong Kong listed company with a concentrated shareholding whose share price fell dramatically in the span of one hour.
Goldin Properties shares had soared 450 percent over a two-month period between mid-March and mid-May, only to slump 48 percent between May 20 and 21 and bounce back up 73 percent in the following seven days, the SFC said in an e-mailed statement on Monday.
Chairman Pan Sutong controls 64.4 percent of shares, while a group of 13 shareholders owns another 30.75 percent, the regulator added. It had issued a similar warning in March against Goldin Financial, also controlled by Pan, after its shares jumped more than 400 percent between September and March.
The dramatic price moves in the shares of Goldin and Hanergy had raised doubts about Hong Kong’s reputation as a global financial hub at a time of increased interest from foreign investors following the launch of the Hong Kong-Shanghai trading link. The link, launched in November, has brought in a flood of Chinese funds, but also made Hong Kong’s market more volatile.
Hanergy, a $40 billion company controlled by Li Hejun, lost half of its value in less than an hour on May 20 and its shares have been halted since the plunge. (Reporting by Elzio Barreto; Editing by Miral Fahmy)