Chinese Cement Maker’s Stock Sinks 99%

A Chinese cement producer came under the spotlight after it suspended stock trading last week, following a selloff that nearly wiped out all its market value in the final 15 minutes of the previous session, as reported by Bloomberg News.

China Tianrui Group Cement Co. announced that trading in its Hong Kong-listed shares had been halted from 9 a.m. local time, pending an announcement related to inside information. I Photo: Tianrui Heavy Industry

China Tianrui Group Cement Co. announced that trading in its Hong Kong-listed shares had been halted from 9 a.m. local time, pending an announcement related to inside information.

Based in the central Henan province, Tianrui’s stock plunged 99% to about HK$0.05 on Tuesday, cutting its market capitalization to HK$141 million ($18 million).

During the selloff, about 281 million shares, a third of the firm’s free float, changed hands, with 80 million shares traded during the closing auction.

Tianrui’s abrupt and dramatic stock rout serves as a reminder of the risks associated with obscure Chinese firms with a high concentration of shareholding and those that engage in financing practices such as using shares as debt collateral.

The loss-making company’s woes also come at a time when an unprecedented housing crisis is causing increased stress among the country’s property developers and construction firms.