Sino Forest regains more ground

TORONTO: Shares of Sino-Forest jumped 13 percent on Thursday, lifted once again by speculative buying and short-covering after a short-seller's damning report recently crushed the Chinese forestry company's stock.

"It's come off so much that there will be a relief rally, short covering," said Paul Gardner a portfolio manager with Avenue Investment Management in Toronto.

Last week, Hong Kong-based Muddy Waters alleged that Sino Forest has fraudulently exaggerated the size of its forestry assets. Shares of the company were pummelled by the allegations and only began to regain some ground on Wednesday.

Shares of Sino-Forest were up 61 Canadian cents at C$5.53 in early trading on the Toronto Stock Exchange on Thursday.

Even with the rebound over the last two days, shares of the Toronto-listed company are down about 70 percent since the report came out.

Copyright Reuters, 2011