How to Go Broke Buying Low, Selling High on Chinese Markets
This article is for subscribers only.
Betting that identical stocks will trade at similar prices in China and Hong Kong is proving a great way to lose money.
The mainland premium on dual-listed shares has surged to an average 113 percent from 30 percent a year ago, burning anyone who sold short China’s high-priced stocks to fund the purchase of cheaper equities in Hong Kong. Valuation gaps reached the widest since 2009 on Wednesday, according to a Hang Seng index that gives greater weight to the biggest companies.