TORONTO, June 22 (Reuters) - Shares of embattled Chinese forestry company Sino-Forest TRE.TO jumped 20 percent on Wednesday as speculative investors jumped back into the stock after a sharp sell-off earlier in the week.
Shares of the Toronto-listed company have plunged more than 85 percent this month, following accusations of fraud leveled by Hong Kong-based short-seller Carson Block and his firm Muddy Waters.
The stock touched a eight-year low on Tuesday, after reports emerged that Sino-Forest’s largest shareholder, billionaire hedge fund manager John Paulson, had dumped his entire 14.1 percent stake in the company.
With Paulson having sold his stake, selling pressure in the market has eased, said Gavin Graham, president of Graham Investment Strategy in Toronto.
“The stock has rebounded a little simply because of the absence of a big shareholder letting go of their position,” he said.
Shares of Sino, which have shed more than C$4 billion in market value this month, were trading at C$2.39 at 10.30 a.m. (1430 GMT) on the Toronto Stock Exchange.
$1=$0.97 Canadian Reporting by Euan Rocha; editing by Peter Galloway