Since Wednesday, shares in three huge Hong Kong-listed companies have lost half their value. Investors in Hanergy Thin Film, Goldin Financial and Goldin Properties are nursing a combined $36bn in paper losses, without a single fundamental reason, such as a big announcement, to explain the slide.
The plunges have highlighted the Hong Kong market’s vulnerability to big share price moves and raised questions on whether a new direct connection between Hong Kong and the volatile Shanghai exchange is changing the dynamic of the southern market.
Up to now, Hong Kong Exchange, which operates the equities market, and its regulator, the Securities and Futures Commission, have not found it necessary to intervene when individual stock prices race rapidly upward or plunge precipitously to earth. But the increasing presence of retail customers and momentum investors, many of them from the mainland, may force a rethink.