Short Seller Threat Has Hong Kong Rally Skipping Small Caps
- Big caps rule Hang Seng’s Asia-beating gains on mainland bids
- Bocom, Fidelity see small equities continuing to underperform
The Bank of China Tower, center left, and other commercial buildings stand illuminated at night in this photograph taken with a tilt-shift lens at night in Hong Kong, China on Friday, Nov. 27, 2015. Secondary private residential property prices dropped 3.9 percent since peaking in September, according to an index published by broker Centaline Property Agency Ltd.
Photographer: David Paul Morris/BloombergHong Kong stocks may be Asia’s star performers this year, but it hasn’t done much to revive the fortunes of the market’s perennial underdogs: small-cap shares.
A peek under the hood of the Hang Seng Index’s 25 percent surge shows it’s being dominated by larger equities, with smaller companies trading at their biggest price discount to the big caps since 2009. That’s despite expectations a trading link between Hong Kong and Shenzhen set up in December would lure mainland money into the former British colony’s smaller shares.