Evergrande shares jump as trade resumes after Hui Ka Yan subject to mandatory measures

Shares of the heavily indebted Evergrande Group closed up about 28 percent on Tuesday as the company resumed its trade on the Hong Kong Stock Exchange, several days after its founder Hui Kai Yan has been subject to mandatory measures in accordance with the law due to suspicion of violating law and committing crimes.

Shares of Evergrande jumped as much as 42 percent during Tuesday’s trading. Another Evergrande stock, Evergrande Property Services Group, closed down about 3 percent. 

Real estate and property management services stocks fell on Tuesday’s closing, with Zhenro Properties Group dropping about 9 percent and Country Garden Services Holdings Co falling about 7 percent.

Last week, China Evergrande said it received notification from relevant authorities that Hui Ka Yan, an executive director of the company and chairman of the board of directors of the company, has been subject to mandatory measures in accordance with the law due to suspicion of criminal wrongdoing.

"There is currently no other inside information in relation to the company that needs to be disclosed," Evergrande said in a statement to the Hong Kong Stock Exchange on Monday. 

In September, several staff working in the wealth management unit of the crisis-hit property developer were placed under a criminal probe.

“The resumption of trading of two Evergrande stocks today has attracted much attention, on the one hand, because investors are concerned about Evergrande's current operating conditions and capital market performance, on the other hand, there is no trading in the A-share market due to holidays, and the Hong Kong stock market is more able to see the market performance of real estate stocks,” Yan Yuejin, a research director at Shanghai-based E-house China R&D Institute, told the Global Times on Tuesday.

Yan noted that Evergrande shares had better-than-expected performance, which was in line with the laws of the capital market. Investors will continue to pay close attention to the situation of Evergrande's real estate projects, the expansion of its property services sector and the development direction of new-energy vehicles, he added.