Now, about them trees.
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As if Sino-Forest didn’t have enough problems, it seems like the Markets Live effect is alive and well.
From those loyal analysts at RBC Dominion Securities on Friday, a note entitled:
RBC puts forward three main reasons why Muddy Waters is wrong and Sino-Forest warrants an “out-perform” rating. We’ll let you decide whether “mounting” is justified in the note’s title (or instead whether “in” should be removed.) Read more
“We are going to provide you with some information on why Muddy Waters research is a pile of crap” — Richard Kelertas, Dundee Capital Markets. [Source: Financial Post]
A bold (and so far unheeded) call from Dundee Capital, given Muddy Waters’ “perfect” track record, depicted by Thomson Reuters in a chart released on Thursday. Read more
Muddy Waters has come in for further criticism of its claims of fraud against the Canada-lised Chinese forestry company Sino-Forest, says Bloomberg. Shares in Sino-Forest have fallen 80 per cent since the research outfit released its report into alleged inaccuracies in the company’s stated plantation holdings. Muddy Waters pre-marketed the report to hedge funds and short-sellers weeks ahead of its public release, said an analyst at Dundee Securities who had a buy rating on Sino-Forest up to June 3. Sino-Forest itself continues to prepare its defence against the claims. FT Alphaville sorts out the pros and the cons of the case so far, while FT Tilt finds further analyst support.
At pixel time Sino-Forest Corporation’s (TRE) was trading at C$4.72, below even Friday’s lows, on the back of continued scrutiny and Moody’s’ announcement it was putting TRE’s bonds on review for a downgrade.
A series of scandals at Chinese companies listed in New York, Hong Kong and Toronto has unsettled investors and raised questions about all Chinese companies seeking to raise capital abroad, reports the FT. In recent months, short-sellers have attacked an unprecedented number of foreign-listed Chinese companies listed, accusing them of fraud or other actions. This has driven down their share prices and inflicted losses on some top investors. Sino Forest, a Chinese forestry group listed in Toronto, lost more than two-thirds of its market value from Thursday after Muddy Waters, a research firm founded by short-seller Carson Block, accused it of overstating sales and asset values. Sino Forest’s denial on Friday failed to stop the slide, which inflicted paper losses of nearly $500m on Sino Forest’s top shareholder, the $37bn Paulson & Co hedge fund.