Central China Securities shares slumped due to possible default
Jul 15, 2019 (China Knowledge) - Shares of Central China Securities dropped on the Shanghai Stock Exchange (SSE) and the Hong Kong Stock Exchange (HKEX), due to the possibility that 2 of its asset-management products worth RMB 241.5 mln may default on payments to investors.
The 2 products backed by a drug-maker named Mingxing Pharmaceutical in Fujian province were deemed risky by Central China Securities. The brokerage had received falsified documents from a fundraiser which indicates that the fundraiser may default on payments and it has already reported the case to the police.
Central China Securities' stock closed at RMB 5.22 on last Friday in SSE, plunging by 9.8%, which is its biggest decline since May 6. On the same day, the shares decreased by 4% to HKD 1.70 on HKEX.
According to the Securities Association of China, Central China Securities'net income was ranked 70th among China's 98 brokerages last year. In 2019, the brokerage has overtaken the Shanghai Composite Index with a 23% increase in its shares on SSE.
It is expected that the increasing trade volumes on the stock market and the launch of a new board for China’s technology companies will bring benefits to the growth of the brokerage's shares.
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