Investors moved to take profits on Macau concept stocks yesterday, prompting warnings that indiscriminate buying into any company hinting at Macau affiliations could bring punishing losses.
With many of them quoted in pennies, such stocks are extremely volatile and prone to large drops when the market at large falls.
Yesterday, however, was the first trading session since the frenzy started in September that the selling hit almost every stock claiming new business in the former Portuguese enclave. Among them, Emperor Entertainment Group slid 45.88 per cent, Ruili Holdings 44.11 per cent, Heritage International Holdings 32.83 per cent and Wing On Travel (Holdings) 28.2 per cent.
An exception was Melco International Development, which leapt 35 per cent on its first trading day after a nine-day suspension. However, it failed to hold on to the gains, ending up just 7.1 per cent.
The fact that Melco - seen by many as the instigator of the Macau frenzy and a top beneficiary with a more than 200 per cent gain since September - failed to sustain another rally was cited as a key reason for the retrenchment.
News that the Securities and Futures Commission would probe firms issuing Macau-related announcements with potentially misleading information also prompted caution.
