Date
24 May 2017
Haitong International has stringent risk controls in margin lending, says executive director Wilson Hui. Photo: EJ Insight
Haitong International has stringent risk controls in margin lending, says executive director Wilson Hui. Photo: EJ Insight

Haitong Intl says it does not hold any Hanergy shares as of now

Haitong International (00665.HK) does not hold any shares of Hanergy Thin Film Power (00566.HK) as of now, a senior company executive said.

“We are in a passive position,” said executive director Wilson Hui. “We are not holding any shares of Hanergy at this moment.” 

The comments came after reports surfaced recently that Haitong was holding 19.4 billion shares of Hanergy — nearly half of the company’s shares in circulation — on behalf of some clients.

The information, which was said to have been provided by a third party to local stock market operator Hong Kong Exchange and Clearing Ltd. (00338.HK), led to Haitong’s shares slide by more than 10 percent last week.

The third party, which is said to be Nasdaq, later admitted that it had made a mistake. It said the correct number should have been 1.94 billion shares, according to a regulatory filing from Haitong.

Hong Kong’s securities regulators are said to have sought the information on Hanergy as they were launching an investigation into unusual share trading in the Chinese solar equipment maker after its shares plunged 47 percent on May 20.

Trading of Hanergy has been suspended since then.

Hui said that Haitong has stringent measures to ensure that margin-lending levels in all the stocks that it deals with are at appropriate levels.

Given the recent volatility in some small-cap shares, the securities firm will enhance risk controls on margin lending, he added.

In other comments, Hui said that Haitong will expand its sales team and that it will open two more branches in Hong Kong by the end of July.

The company is expanding its operations as it expects to benefit from the impending Stock Connect program between Hong Kong and Shenzen.

Haitong International is a component of the Hang Seng Composite SmallCap Index.

The Shenzhen-Hong Kong Stock Connect will help drive fund flows into small and medium-sized stocks in Hong Kong, Hui said.

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JH/JP/RC

EJ Insight reporter

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