Hong Kong stocks rose for the sixth straight session to 21-month highs yesterday while stock market activist David Webb listed 50 Hong Kong-listed companies on his website that investors should not invest in.
He called some of the companies "bubbles" on which the Securities and Futures Commission has issued warnings.
He said the listed companies which own those shares continue to hold them despite warnings from regulators because the gains on those stocks "are not intended to benefit their shareholders."
He said there are multiple holdings below the 5 percent disclosure threshold which when aggregated will provide significant voting power when the companies seek approval to do something that "might not make sense to others." Luen Wong Group (8217), Milan Station (1150) and China Jicheng (1027) are among the 50 listed companies.
Shrugging off threats posed by a global cyber security attack and a missile test by North Korea, market sentiment yesterday was aided by signs of steady money flows from mainland China, and stabilization in the China market. Main stock indexes rebounded for the third straight day as the government moved to sooth market fears of tighter regulation.
The Hang Seng Index rose 0.9 percent to 25,371.59 while the China Enterprises Index gained 1.6 percent, to 10,450.35 points.
AAC Technologies (2018) was attacked by shortseller Gotham City Research last week and its shares fell 4.4 percent to HK$91.75 yesterday despite further clarification.
UBS pointed to signs of mainland Chinese investors diversifying away from domestic exposure.
"We have observed southbound investors showing increased interest in non-Chinese HK shares, which may indicate their intent to diversify and avoid the domestic spill-over effect," UBS strategist Gao Ting said.
The Shanghai Composite Index added 0.2 percent to 3,090.23 points.
Meanwhile, Saudi Arabia and Russia, the world's two top oil producers, said an output cut needed to be extended for a further nine months until March 2018 to rein in a global crude glut.
That drove a roughly 2.5 percent rise in oil prices, and spurred gains for copper and iron ore and in commodity- linked currencies including the Australian and Canadian dollars and Russian ruble.