China Minzhong up after funds, investors buy 10.3% stake

Shares of China Minzhong Food Corp jumped after it said institutional funds and high net worth investors had bought a 10.3% stake in the food processing firm from Olympus Capital Holdings Asia at a placement price of $0.80 per share.

China Minzhong shares rose as much as 6.7% to $0.80 after a trading halt was lifted on Friday. Nearly 14 million shares were traded, 1.8 times the average full-day volume over the past 30 days.

But even after the rise, the stock was still down nearly 2% so far this year, lagging the 25% gain in the FT ST Small Cap Index.

China Minzhong shares had plunged almost 12% on Thursday after a block trade fuelled speculation that one of its largest shareholders had sold its stake.

Olympus, a private equity fund, had invested in China Minzhong since 2006, the company said in a statement on Friday.

“However, given the closed end nature of private equity funds, it is a natural progression for private equity firms to liquidate their investments post IPO and return capital to their investors,” China Minzhong said.