The Hong Kong-Shanghai stock connect has helped drive the Hang Seng properties index up by nearly 17 percent since it opened in November, but now the cross-border equities link has helped to bring one developer down 41 percent. In a single day.
Hong Kong-listed Goldin Properties, which is owned by Guangdong native Pan Sutong, slid from an opening price of HK$24.25 per share to as low as HK$9.56 per share, before recovering to close at HK$14.24.
Goldin Properties’ sister company, Goldin Financial also slid precipitously today, falling from HK$34.80 per share to as low as HK$12.20 per share, before closing at HK$17.46.
Since the stock connect was opened in November of last year, the Hang Seng Properties Index, a measure of real estate shares on the Hong Kong stock exchange has risen nearly 17 percent, with mainland shares among the top performers.
Goldin Properties Rose 660 Percent This Year
Even in midst of a major surge in mainland-linked shares on the Hong Kong exchange, Goldin Properties stood out with its more than 660 percent increase in value since the beginning of 2015. During last week alone the real estate stock was up by 350 percent.
Unfortunately for Goldin and Pan, investors seem to have fled the two companies even more quickly than they had piled in during the last three months.
In an interview published today by Bloomberg, Pan who trades in wine and polo ponies as well as property, appeared sanguine about his losses. “A genuinely wealthy person would not count his wealth every day,” Pan told veteran reporter Frederik Balfour. “It’s better if you just leave me off the list.”
The mysterious stock price trajectory of Pan’s two Hong Kong listed companies roughly parallels the abrupt rise and fall of sudden market darling Hanergy Thin Film Power Group Ltd. The Beijing-based solar power company fell by 47 percent on Tuesday, before trading in the company’s stock was suspended.
Other mainland shares have also benefitted from the stock connect, which has brought many speculative investors from the mainland onto the Hong Kong bourse, as well as boosting trading volumes across the exchange by more than double.
Despite sliding in recent days, Evergrande Real Estate is up by 113 percent since January 1st, and Greentown China Holdings, which needed a bailout last year, is up nearly 37 percent so far in 2015.
Creating a $5 Billion Mixed-Use Project
Pan’s Goldin Properties took on its current name in 2008 after acquiring a site in Tianjin, where the company plans to build a $5 billion mixed used development.
In the port city of 14 million people just east of Beijing, Goldin is building Fortune Heights, a 220 acre, US$5 billion development that includes a 117-storey office tower, 64 villas, an international school, convention centre and a polo club.
Tianjin has been singled out lately be some property analysts as a case study in over-investment. Last year a survey by nonprofit real estate industry association the Urban Land Institute ranked Tianjin 24th among 36 cities in China for real estate development prospects.