A surprise deal to power a Pacific island casino project, signed between two of the Hong Kong stock exchange's more talked about members, has left investors jittery.
Shares in solar panel manufacturer Hanergy Thin Film Power Group - up fivefold in the past 12 months - traded flat yesterday, after the announcement of a proposed joint venture with Imperial Pacific International to build a renewable energy power plant in Saipan.
Imperial investors initially cheered the news, sending shares in the Macau junket backed resort developer up more than 14 per cent in early trading. The stock closed down 8.57 per cent at HK$1.60.
"Judging from the market reaction shareholders don't think it adds much value," activist investor David Webb said.
"Both stocks are bubbles and so are made for each other," said Webb, who has followed the two companies closely over the past six months.
Under a memorandum of understanding both firms plan to design and build a renewable energy plant to help power Imperial Pacific's yet-to-be-built casino resort, and surrounding islands.