UPDATE: Sino-Forest Up 18% Amid Reports Speculators Have Jumped Back In To The Stock
Sino-Forest Corp (TRE.TO) continues to build on yesterday's recovery - when it rose from the lows of $1.29 around midday to close at $1.99 - and is up another 18% at around $2.35 (it has touched $2.52) late morning. Around 9 million shares have been traded, although there is no fresh stock specific news around.
There are reports that speculators have jumped back in to the stock after some strong selling pressure in recent days.
The gains come despite reports that Fitch Ratings downgraded Sino-Forest debt on Tuesday to double-B-minus from double-B-plus and placed its long-term outlook under negative review. According to the Globe and mail, the news shocked bondholders, who started selling, driving down the prices on Sino-Forest's latest $600-million bond offering to around 40 cents on the dollar.
The newspaper said while shareholders have been taken on a wild ride since Muddy Waters Research released its critical report on June 2, bondholders had felt relatively protected. Sino-Forest's most recent bond issue slumped to 60 cents on the dollar after the report was released, but then held steady around that level, it said.
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