Throwback: When an Obscure Stock In Hong Kong Went Up 5000%, and Nobody Could Explain Why, FT

“The company, which has lost money in seven of the last eight years, has become a poster child for the erratic and often hard-to-explain ascents and dives in obscure securities in Hong Kong. Until its suspension, Ding Yi Feng had the best three-year return of the 1136 companies on the MSCI Emerging Markets index, up more than 5,760 per cent to a capitalisation of almost HK$29bn ($3.6bn).

The company was added to MSCI’s index in 2018, meaning investors tracking the benchmark had no choice but to buy it. BlackRock, for example, held 2.29 per cent of the stock, according to the latest listing of shareholders from Bloomberg. An MSCI spokesperson said that the index provider has a “methodological approach to inclusion” which takes into account a stock’s market value, free float and liquidity”. Read more

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