Soar and slump spurs Meitu quizTop News | Carrie Chen Mar 21, 2017
Internet company Meitu saw prices slump by as much as 33 percent from its peak in the last hour of trading yesterday.
The Securities and Futures Commission reportedly has sent letters to brokerages three times since December - when Meitu debuted on the exchange - requiring transaction records of Meitu and information on customers involved in the transactions.
The earliest requirement was reportedly made in January, asking for records as early as the first day of trading, a rare situation.
Hong Kong Exchanges and Clearing reportedly has made the same requirement to brokerages on SF Express, an express delivery firm that was traded through the Shenzhen-Hong Kong stock connect.
A source said it is rare for HKEX to make such a requirement, especially for those on the stock connect. It is believed to be at the request of Shenzhen Stock Exchange.
HKEX declined to comment.
Meitu - whose spokesperson is celebrity Angelababy, who is also a shareholder - earlier rallied to a record high of HK$23.05 yesterday with a market cap at HK$97.4 billion, an 11-day continued rise driven by its inclusion on the stock connect list on March 6. But just 10 minutes before the A-share market closed yesterday, it fell 25 percent. It later fell as low as HK$15.40, 33 percent down from the peak. Shares closed at HK$15.98, down 11.2 percent.
The drop was due mainly to the previous rally, said Alex Wong Kwok- ying, director of Ample Finance Group.
"It is normal for a new economy share to be volatile in this way," he said. "The market is surprised because of our culture, which is in an old economy way and has not accepted cycles of this kind."
It may also be due to investors' pre- action before its final results next week, said Ivan Li Sing-yeung, head of research at Sinopac Securities (Asia).