Media Report Triggers Sell-off of Vapor Stocks

E-cigarette stocks fell on Aug. 5 after Chinese state media ran reports about the risks of vaping, reports Reuters.

Huabao International Holdings tumbled 8 percent in Hong Kong morning trade while China Boton Group Co. fell 4 percent. Market leader Relx Technology closed almost 5 percent lower in New York after the Xinhua news agency published a report saying that minors were gaining easy access to e-cigarettes.

Xinhua said its reporters made unannounced visits to e-cigarette shops in the northern cities of Tianjin and Shenyang and found that while all had signs stating sales to minors were prohibited, enforcement of the law varied in practice.

The sell-off demonstrated how investors remain on edge and on the hunt for clues about which companies might be vulnerable to state intervention after the property, education and technology sectors were hit by Beijing regulators in recent months with unprecedented sweeping rules.

Similar market sentiment took hold of liquor-related stocks after the Ministry of Science and Technology posted an article citing a study that linked alcohol consumption to cancer.

Investors in Chinese companies often scrutinize state media reports for hints about regulators’ thinking.

China is the world’s largest consumer of tobacco products, with more than 300 million smokers, according to the World Health Organization.