Support for arrested owner drives Next Digital shares, watchdog urges caution (updated)

Most Kwai Chung

11/08/2020 16:01

(Adds statements from SFC statement and Most Kwai Chung)
    HONG KONG, Aug 11 (Reuters) - Hong Kong's markets watchdog
urged investors to "exercise extreme caution" after shares of
Next Digital Ltd  0282.HK  rose more than 2,000% to a 12-year
high, spurred by an online campaign for its detained owner media
tycoon Jimmy Lai.
    On Tuesday, the company's shares led gains on the Hong Kong
bourse and it was the third most actively traded stock. At one
point, it was up 668.6% on the day before retreating slightly.
Since Friday's close, Next Digital has risen 2,078%.
    "Investors are strongly advised to exercise extreme
caution," the Securities and Futures Commission said in a
statement after Tuesday's market close. It said it had been
monitoring and would continue to monitor the shares.
    Police on Monday detained Lai, along with other executives
of his media company in the highest-profile arrest under a
national security law imposed by Beijing, which critics say 
crushes freedoms in Hong Kong.  urn:newsml:reuters.com:*:nL4N2FD0D4
    Pro-democracy activists have started a campaign to encourage
buyers for Next Digital shares and for the Apple Daily
anti-government tabloid it publishes. 
    More than half a million copies of the paper were published
on Tuesday, up from the usual 100,000. Buyers queued in the
early hours and vendors had to re-order issues before the
morning commute time.
    One post on a local forum used by pro-democracy supporters
said: "Freedom is priceless, use $$ to support Jimmy Lai."
    Next Digital's market value has risen from HK$197.7 million
($25.42 million) early on Monday to HK$5.17 billion ($666.71
million).
    The media group said in a bourse filing its operations have
continued normally and it did not expect the arrests to impact
its financial position.
    Brokers said the surge was also driven by speculation Lai
may sell the business.
    "Speculation of sale of control and its low price level
provided day traders a convenient excuse to bet on the stock," a
strategist from a local brokerage said, asking not to be named.
    Another local media stock, Most Kwai Chung Ltd  1716.HK  has
also jumped 292% so far this week.  
    Most Kwai Chung's board said in a filing it was not aware of
any reason for the price increase. 
($1 = 7.7500 Hong Kong dollars)

 (Reporting by Donny Kwok and Clare Jim; Additional reporting by
Alun John; Editing by Barbara Lewis)
 ((donny.kwok@thomsonreuters.com; +852 2843 6470; Reuters
Messaging: donny.kwok.reuters.com@reuters.net))