Hopewell Holdings yesterday strengthened its reputation as the rumour mill of the Hang Seng Index.
Rumours that the company was planning either a share placement or a rights issue at $3.60 per share caused near-panic selling of the stock and was largely responsible for pulling the rest of the market lower in late trade.
Hopewell dropped a dramatic 6.3 per cent before climbing back to end the day at $4.125, down 5 per cent.
Hopewell management showed uncharacteristic sensitivity toward investor sentiment by issuing a denial through the stock exchange after the close of trade.
Managing director Gordon Wu said: 'The company has no immediate plan for a rights issue.' However, the denial did little to quell brokers suspicions.
ING Barings sales director Anthony Davis said: 'Where there is smoke there is fire. Everyone knows the problems they have with their balance sheet, they need a rights issue.' Antony Edwards, director at BZW Asia, said: 'I would not be surprised if Hopewell has a rights issue in the near future.' Hopewell is known to be in need of funds to finance its ambitious infrastructure projects in Thailand and elsewhere in the region.
