Reeling giant's potential loss on currency bets exceeds its value
Citic Pacific shares lost more than half their value yesterday after the blue-chip company shocked markets by warning of a huge potential loss from unauthorised currency bets.
Shares of the Hong Kong arm of the mainland's biggest state-owned investment company - which had been suspended from trading - plunged 55.1 per cent, to HK$6.52, shrinking its market capitalisation to HK$14.3 billion - less than the HK$15.5 billion it says it stands to lose.
Brokerage firms cut their ratings on the company and their targets for its share price.
The company has faced a barrage of criticism following its disclosure on Monday. Citigroup analyst Anil Daswani decried its 'cowboy' hedging policy. Lawmakers and market watchers condemned its delay in reporting the case and sceptics suggested insider trading might be involved.
Ratings agency Moody's Investors Service cut its rating on Citic Pacific debt and said it would be on review for possible further downgrading.