Analysts steering clear of S-chips, China Minzhong

IN yet another blow to the already rock-bottom confidence in S-chips, Monday's short-selling attack on China Minzhong Food (CMF) by Glaucus Research has prompted some local broking houses to either cease coverage of CMF or even the entire S-chip sector.

" It's advisable to just avoid anything with China in its name," said a dealer at a local broking house. " Better to be safe than sorry." S-chips refer to stocks of China-based companies listed in Singapore.

Albeit in a weak day for the entire market, S-chips as a whole suffered from the CMF fallout with the FTSE ST China index slumping 1.1 per cent to 219.27, its lowest for the year. The China Index is now down about 8 per cent for 2013 compared with the STI's loss of 4.2 per cent.

On Monday, US-based investment house and short-seller Glaucus released a 49-page report in which it accused vegetable producer CMF of fraud and financial irregularities and estimated the shares to be worthless.