Sino-Forest fall drags down Canada-listed Chinese stocks

The travails of Sino-Forest (TRE.TSX), a timber firm accused of financial irregularities, have dragged stock prices of Canadian-listed China-focused companies down by 15% this month, Bloomberg reported. The fall is over four times the decline in the broader Standard & Poor’s/TSX Composite Index. Sino-Forest’s share price has declined roughly 75% since Muddy Waters, a research outfit, accused the firm of financial fraud in a report released on June 2. The company’s investors will have their first chance to query management today in a conference call following an earnings release. Accusations of dodgy finances have also weighed on other China stocks on the Toronto bourse. “It freaked people out,” said Marcus Xi, a money manager at the Vancouver-based Genus Capital Management. “They got shell-shocked.”