Chinese miners plunge as reverse-listing contagion spreads
Iron, zinc and coal miner China Natural Resources shed 20% of its value on the Nasdaq stock exchange in morning trade on Monday in the absence of any fresh news about its operations while China Shen Zou Mining lost over 8%, the worst performers in the sector.
Investors are continuing to worry about the soundness of Chinese companies that came to the US market through so-called reverse listings with the value of the 98 companies declining sharply in recent weeks as creative accounting and other irregularities are uncovered at firms engaging in operations as diverse as software and timber.
By mid-day China Natural Resources Inc. traded down 20.12% with the number of shares exchanged three times the usual volume. The losses were not accompanied by any news release or statement by the company which is worth some $182.7m on the Nasdaq. China Natural Resources operates iron, zinc and other non-ferrous metals mines primarily located in Anhui Province in China and is developing coal mines in Guizhou Province.
By mid-day China Shen Zou Mining had lost 8.3%. The company is worth some $102.3m on Amex and is trading down 60% for the year. It mines fluorite, zinc, lead and copper in China and Inner Mongolia.
“If I were going to run a fraud, I would find the most gullible people and if the locals in my backyard know that I don’t have a business here, then I will go abroad.”