The All Ordinaries (Index: ^AORD) (ASX: XAO) has posted a 0.5% fall lead by the big miners and banks. It seems the Reserve Bank of Australia is being blamed for the fall, following its decision to keep the cash rate on hold yesterday. The market was disappointed, after factoring in a 25 basis point cut, which would have likely stimulated the markets.
These four stocks took a tumble today and here's our view…
Online retailer Ensogo Ltd (ASX: E88) – ex-iBuy Group – dropped 13.8% to 12.5 cents. Shares have now fallen 26.5% in the past week. It seems the issue of 69 million new shares to a cornerstone shareholder in VipShop Holdings has diluted shareholders by around 12%. Not only that, but shares were issued at a significant discount – 10.8 cents – to the prevailing share price at the time of around 17.5 cents.
Chinese retailer Sunbridge Group Ltd (ASX: SBB) slipped 12.5% and hit a new all-time low of 4.5 cents, as concerns were again raised over the transparency of foreign-listed Chinese companies. We covered the issue in more detail here. Add in a number of odd accounting practices and lack of a decent dividend – despite $30 million cash in the bank – and Sunbridge is one of the highest risk stocks on the ASX.
Biotechnology stock Acrux Limited (ASX: ACR) dropped 11.8% to 90 cents, as investors fret over the risks associated with the company's flagship testosterone treatment product, Axiron. As colleague Ryan Newman points out here, the US Food and Drug Administration (FDA) expressed its concern over possible increased risk of heart attack and stroke associated with testosterone treatments.
Fortescue Metals Group Limited (ASX: FMG) dropped 5.4% to $2.29, as the iron ore price fell 1% overnight to US$62.24 a tonne, close to its lowest level in nearly six years. Chinese steel demand is hardly growing as China's growth slows, leading to lower iron ore prices. Suggestions that the price may recover next month appear to be more hope than reality.
