Fosun Pharmaceutical Shares Pick Up After Group Denies Rumors About Founder Guo Guangchang
Liao Shumin
DATE:  Jul 06 2017
/ SOURCE:  Yicai
Fosun Pharmaceutical Shares Pick Up After Group Denies Rumors About Founder Guo Guangchang Fosun Pharmaceutical Shares Pick Up After Group Denies Rumors About Founder Guo Guangchang

(Yicai Global) July 6 -- Some rumors suggesting Guo Guangchang, a well-known Chinese entrepreneur and founder of Fosun Group, disappeared caused the company's share price to slump today. However, share-price decline recovered substantially after Fosun Group and its listed affiliates denied the rumors. As a result, major indexes of the Chinese A-share market rebounded after falling in intraday trading.

Shanghai Fosun Pharmaceutical (Group) [HKG:2196; SHA:600196] saw a plunge in its A-shares and H-shares after 10.30 a.m. today, with the former down by as much as 8.87 percent and the latter down by more than 7 percent. Transactions were significantly higher than usual.

Fosun Pharmaceutical issued an urgent statement at the Shanghai Stock Exchange today, saying online reports that Fosun Group Chairman Guo Guangchang has disappeared are "untrue and malicious slander." Guo is just attending the 8th Annual Global Conference of Qin Entrepreneurs held in Xi'an, Shaanxi, as a keynote speaker and Fosun Group is operating normally, the statement stressed.

Guo is a well-known entrepreneur in China. He was detained in December 2015 for judicial authorities' investigation, but reappeared three days later and resumed his job. Fosun-related stocks also slumped at that time.

Two weeks ago, shares in Fosun Pharmaceutical plummeted more than 8 percent in one day on rumors that the China Banking Regulatory Commission had ordered major banks to conduct spot checks on leading private companies including Fosun Group in terms of loans for overseas investment. Though Fosun stock picked up later but is still below pre-plunge levels to date.

Fosun Pharmaceutical's A-shares closed down 3.67 percent and H-shares ended down 2.81 percent today. However, the collapse in Fosun Pharmaceutical's share price seems to have affected the movement of major A-share market indexes today. The Shanghai Composite Index fell as much as 0.42 percent before trading suspended at 11.30 a.m., with price decline rate expanding to 0.56 percent at one point in the early afternoon. However, it picked up steadily thereafter and closed up 0.17 percent today.

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Keywords:   MSCI,Group,Guo Guangchang,Share Price,Plunge,Slump,Market Rumors