Shanghai
THE rush to pile into the world-beating stock rally in Shanghai has become so fevered that many investors are passing over identical shares that are trading more than 10 per cent cheaper in Hong Kong.
It's a reminder of how froth can overwhelm basic value investing principles in a booming market. Companies with equity listings in both cities are about 12 per cent less expensive in Hong Kong than on the mainland, the widest gap since July 2012, according to the Hang Seng China AH Premium Index.
As recently as last month, the relationship was reversed, with Hong Kong shares trading at higher prices on average than their peers some 1,220 km to the north. The valuation gap turned in Shanghai's...
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