Brokerages Swing Most on Record in Hong Kong Amid China Rally

Shares of Chinese brokerages in Hong Kong are swinging by the most on record, whipsawed by volatility in mainland markets amid a world-beating rally.

Citic Securities Co. today sank as much as 5.2 percent and rallied 5.4 percent, after the gap between the daily high and low price for shares of China’s biggest brokerage widened yesterday to a record. Haitong Securities Co. yesterday erased an 2 percent loss to rise as much as 20 percent, before trading in a 12.8 percentage-point range today. The brokerages’ listings in Shanghai soared the maximum 10 percent today.

“Market turnover has been rising and that’s going to benefit brokerages,” Linus Yip, a strategist at First Shanghai Securities in Hong Kong, said by phone. “Mainland investors are probably switching to the brokers’ Hong Kong-listed shares as the daily limit in Shanghai has been reached.”

The value of shares changing hands on China’s two biggest exchanges exceeded 1 trillion yuan ($161 billion) for the first time on Dec. 5, more than five times the average daily turnover during the past three years. The Shanghai Composite Index yesterday topped 3,000 for the first time since April 2011 and investors are opening trading accounts at the fastest pace in three years.

Citic Securities’ HK$6.70 swing between yesterday’s high and low was the biggest on record, as was Haitong’s HK$4.15 fluctuation, according to data compiled by Bloomberg. Volatility continued today, with Haitong dropping 8.5 percent, rising 4.3 percent, then reversing direction again to fall 1.1 percent to HK$22 at the trading break. Citic Securities rose 3.9 percent to HK$33.

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