Fat finger or mistaken identity? Hong Kong stock in mystery drop
Want Want China Holdings lost as much 7.8 per cent just as the pre-market session opened.
By Bloomberg |
By Jeanny Yu
A snack maker suddenly tumbled the most in more than a year in Hong Kong, with traders speculating someone may have mistakenly sold the stock.
Want Want China Holdings lost as much 7.8 per cent just as the pre-market session opened, with some 101,000 shares changing hands at the intraday low of HK$5.65, according to data compiled by Bloomberg. Want Want, a member of the Hang Seng Index, quickly erased the losses within minutes after regular trading started. It added 0.7 per cent as of 2:13 p.m. local time.
Possible explanations included a trading error known as a “fat finger.” Others guessed it was a case of mistaken identity: Want Want’s Chinese name shares three out of its four characters with China Zhongwang Holdings, which tumbled as much as 21 per cent after its billionaire owner was charged with evading US tariffs.
“It could be someone’s mistake, but it could also be some investors’ own judgment over the stock,” said Jackson Wong, asset management director at Amber Hill Capital. “It’s quite a big discount for Want Want. That deal was the biggest in the pre-market.”
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A spokesperson for Hong Kong Exchanges & Clearing said the market was operating smoothly Thursday and that it does not comment on individual stocks. An investor-relations representative for Want Want said in an email that the company wasn’t aware of the reason behind the stock move.
