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China firm shares tumble after failed Coke bid
AFP - 2 hours 54 minutes ago
HONG KONG (AFP) - - Shares in Hong Kong-listed Huiyuan Juice tumbled sharply Thursday, at one point losing half their value, after Beijing rejected a plan by Coca-Cola to acquire China's top juice maker.
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At 0223 GMT, Huiyuan's shares were down 44.9 percent at 4.57 Hong Kong dollars (0.59 US), after falling as much as 53 percent in early trade, according to Dow Jones Newswires.
Trading of the stock resumed Thursday after being suspended a day earlier, when China's commerce ministry announced that it was blocking the high-profile acquistion over fears that it would damage competition.
The rejection has raised concerns amongst foreign investors that China was becoming increasingly protectionist.
Analysts said the sharp fall in Huiyuan's share price was expected as the price had doubled since early September, when Coca-Cola offered 12.20 dollars for each of its Hong Kong-listed shares.
J.P. Morgan analyst Selina Sia said she was concerned about the outlook for Huiyuan because of weakening juice consumption in China.
"Slower juice sales seemed to be a sector-wide issue in 2008," Sia told Dow Jones Newswires.
"Huiyuan's business performance in 2009 could deteriorate further if consumption sentiment becomes worse," she added.
UOB KayHian analyst Ken Lee told Dow Jones that he expected investors would refocus on Huiyuan's business development after China's government rejected Coca-Cola's proposed acquisition.
"The share price will come under heavy pressure, given the expensive valuation," Lee said.
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