Radioactive fish or toxic investors: What's killing China Fisheries' stock price?

So far, the company cannot explain its 30% loss in today’s trading, but a research firm says the share prices might be a casualty of the Japan disaster.

In a report sent to Singapore Business Review, DMG Research said the fall in share prices could be due to news of Japan dumping radioactive water into the sea.

Newswires reported that workers at Japan's quake-hit nuclear plant begin to dump water with low levels of contamination into the sea on April 4. It is estimated that about 11,500 tonnes of water will be released into the sea at the Fukushima Daiichi nuclear plant.

“We think investors could be concerned on the quality of fish caught in the nearby region,” DMG Research said.

SGX has ordered CFG to answer its query earlier today about the “substantial fall” in its share prices and the company has responded by saying the sudden drop also had it at a loss for words.

“The Company is not aware of any information not previously announced concerning the Company, its subsidiaries or associated companies which, if known, might explain the trading,” CFG said.

Despite the sudden tumble in CFG’s stocks, DMG Research said the company’s catch in the Pacific Ocean should not be affected for now as around 55% of its total revenue comes from the harvest of Alaskan Pollok in the Sea of Okhotsk and the Bering Sea.

DMG said feedback from the Russian Pollock Catchers Association (RPCA) point to the distant possibility of fish contamination in the Pacific Ocean.

RPCA announced on April 5 that it is working with the FSUE TINRO-Center to monitor the radiation levels of harvested within the Sea of Okhotsk, the Bering Sea, the South Kurils zone and the Russian zone of the Sea of Japan.

DMG Research has maintained its target price of S$2.18 for CFG stocks based on the RPCA report concluding the absence of radioactive contamination in the Russian Far Eastern seas and assuring the safety of fish harvested in the region, and the considerable distance the Sea of Okhotsk and Bering Sea have to the Fukushima plant.

The seas are estimated to be ~1,800km and ~3,800km, from the nuclear plants.

The research agency noted, however, that the continued dumping of radioactive water by Japan which will further contaminate the ocean, and the lower expected catch from the South Pacific/Mauritania operations remain risks CFG has to consider.