Commentators have been shocked, shocked, to find that there’s gambling going on in Chinese and Hong Kong shares. The immediate cause of worry was the plunge in the Hong Kong-listed shares of solar group Hanergy Thin Film on Wednesday and of two companies in the Goldin horse breeding-to-finance conglomerate.
Everyone from academics, the media and amused City onlookers have rushed to explain that the Chinese market is dominated by mere speculation. Ridiculous gains and losses in shares had nothing to do with fundamentals because the gamblers involved can’t even spell “price-earning ratio” — or in some cases read and write, if reports of the lack of literacy of many of those opening mainland brokerage accounts are accurate.
It is true that Chinese markets are a speculative heaven. So, too, are stock markets everywhere, to a greater or lesser degree. Indeed, that is a large part of the appeal, as a glance at the propensity of traders to take a personal