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TwitterThe 75 percent decline in Sino- Forest Corp., the timber company targeted by short seller Carson Block, has dragged other Chinese companies trading in Canada to the biggest monthly decline in almost three years.
An index of Canadian shares of China-focused companies, excluding Sino-Forest, sank 13 percent this month, four times more than the decline in the Standard & Poor’s/TSX Composite Index. Companies as diverse as Silvercorp Metals Inc. (SVM), Asia Bio- Chem Group Corp. and GLG Life Tech Corp. (GLG), an artificial- sweetener maker, have plunged at least 19 percent since Block said Sino-Forest manipulated financial data.
“People got very emotional and started to dump everything related to China,” said Rui Feng, chairman and chief executive officer of Silvercorp, which mines in Henan Province.
Sino-Forest, which produces forest products, has tumbled since June 1, the day before Block’s Muddy Waters LLC said its stated timber holdings don’t match Chinese city records. The company has denied the assertions and published documents it says back up its financial disclosures. Sino-Forest, based in Hong Kong and Mississauga, Ontario, is scheduled to release first-quarter results tomorrow.
The index of 50 other Chinese companies trading in Canada, based on a list provided by TMX Group Inc., has plunged nine times as much as the Shanghai Stock Exchange Composite Index since June 1. TMX, owner of the Toronto Stock Exchange, defined Chinese companies as those with most of their operations and management in China, according to Carolyn Quick, a TMX spokeswoman. Most of the companies listed in Canada after 2005.
An index of Canadian shares of China-focused companies, excluding Sino-Forest, sank 13 percent this month, four times more than the decline in the Standard & Poor’s/TSX Composite Index. Companies as diverse as Silvercorp Metals Inc. (SVM), Asia Bio- Chem Group Corp. and GLG Life Tech Corp. (GLG), an artificial- sweetener maker, have plunged at least 19 percent since Block said Sino-Forest manipulated financial data.
“People got very emotional and started to dump everything related to China,” said Rui Feng, chairman and chief executive officer of Silvercorp, which mines in Henan Province.
Sino-Forest, which produces forest products, has tumbled since June 1, the day before Block’s Muddy Waters LLC said its stated timber holdings don’t match Chinese city records. The company has denied the assertions and published documents it says back up its financial disclosures. Sino-Forest, based in Hong Kong and Mississauga, Ontario, is scheduled to release first-quarter results tomorrow.
The index of 50 other Chinese companies trading in Canada, based on a list provided by TMX Group Inc., has plunged nine times as much as the Shanghai Stock Exchange Composite Index since June 1. TMX, owner of the Toronto Stock Exchange, defined Chinese companies as those with most of their operations and management in China, according to Carolyn Quick, a TMX spokeswoman. Most of the companies listed in Canada after 2005.
