Hanergy stock price soars 46 percent during two sessions

Short-sellers trying to grasp any straw

Another Hong Kong broker who pays special attention to Hanergy pointed out that short-sellers might be pulling the strings behind the unusual practice of the bank. "The purpose is to sell a large number of stocks in a short period of time in order to drive down Hanergy's stock price," he said. It is hard for individual investors to raise 10 million HKD within one or two days. The result of the bank pressing for debt repayment is either investors selling their holdings to pay the loan, or the bank forcing the selling of customers' stocks.

Thanks to the steady growth of Hanergy's share price, there are now few big short sellers. The best-known one is BHP, a Canadian hedge fund. There was once a rumor that BHP has tried to short Hanergy's stocks, which only resulted in failure and heavy loss. Some reports state that BHP might be carrying a loss of $3 billion.

"Short sellers are desperate to grasp any straw now. No organization will lend them Hanergy's shares," the above-mentioned broker analyzed.

Upside potential for Hanergy

Analysts point out that many causes have spurred the recent surge of Hanergy's stock price. On March 3, Hanergy Holding Group published an earnings forecast, declaring that its net profit for the 2014 financial year will enjoy a year-on-year increase of over 55 percent. Favorable fundamentals continue to attract investors. In addition, with the increasing public concern on environmental protection, and the southward channel on the much-touted Shanghai-Hong Kong Stock Connect, some mainland funds also contributed to driving up stock prices.

Recently, the well-known Hong Kong financial analyst Cen Zhiyong cited data from PowerTicker and noted that during the past two months, Hanergy had witnessed the most equity net inflows among numerous stocks of the Shanghai-Hong Kong Stock Connect, involving nearly 400 million yuan, accounting for 6.6 percent of the total turnover.