Hong Kong’s watchdog is adopting a “front-loaded” approach to policing the city’s markets following a series of stock crashes and wild price swings that risk damaging the credibility of Asia’s most international capital-raising venue.
Simultaneous price crashes in a group of small-cap stocks last month erased $6bn in market capitalisation for no known reason. The episode echoed previous plunges such as that of Huishan Dairy in March, when the stock dived more than 90 per cent, erasing $3.9bn in equity value in less than an hour — again for no reason known at the time.
Ashley Alder, head of the Securities and Futures Commission, used a speech on Thursday to outline a more aggressive stance that will see the regulator take on a role overseeing listed companies that has been considered the purview of the Hong Kong Exchange.