Keep close tabs on stock connect shares

Business | 21 Mar 2017

Yesterday, most Asian stock markets followed the United States to consolidate slightly. But the Hang Seng Index managed to gain 192 points to close at 24,501 - the highest level since August 2015.

Stock king Tencent (700) rose 2.7 percent to an all-time high of HK$228.20. This is a core holding that many investors, including Dr Check, would like to keep long term.

However, the stock that drew the most attention was Meitu (1357). The company offers a portfolio of innovative photo and community apps, with 400 million users, mostly in China. The firm's stock has no price-to- earnings ratio, as it was still in the red. As at the fiscal year ended December 31, 2015, the company reported a loss of 2.2 billion yuan (HK$2.47 billion).

The company went public on December 15 at an initial public offering price of HK$8.50. After the stock was included in the list for the Shenzhen-Hong Kong Stock Connect starting on March 6, the share price rallied, once hitting HK$23.05 yesterday, before finally closing at HK$15.98, down 11.2 percent.

Another similar stock was Zhou Hei Ya (1458), a leading brand and retailer of casual braised food in China. It listed in November at an IPO price of HK$5.88. The share price once rallied to HK$9.92 yesterday, before closing at HK$7.97, down 5.5 percent.

SAR stock investors should closely monitor the Hong Kong stock exchange website. Click the HKEXnews under the related links. Then, you can see Stock Connect Shareholding Search under Shareholding Disclosures. You can do a stock connect southbound shareholding search by date, to find out about a certain stock, and what stake Chinese investors are holding.

As of Friday, southbound investors held 194 million shares of China Shenhua Energy, or 5.72 percent of outstanding shares, which was quite substantial.

Dr Check and/or The Standard bear no responsibility for any decision made based on this column.

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