There are two explanations for such a bizarre plot. Each is possible, although both stretch credibility. The first is that whoever handed out the stock did so in a cack-handed attempt to swing the vote in favour of the buyout offer. The second is that someone doled out the shares - or pretended to - in a deliberate bid to scupper the deal.

The first explanation is perhaps not as outlandish at it might seem. Under the vote's rules, half the company's shareholders by number have to approve the proposal for the buyout to succeed. Given small shareholders' longstanding scepticism towards Mr Li's attempts first to sell PCCW and then to take the company private, bulking up the numbers in favour could just swing the vote.

So at first glance, yesterday's rally in the share price might seem to reflect opportunist investors' belief that the alleged attempt to manipulate the vote makes the buyout proposal more likely to succeed.

Yet even though the stock climbed to HK$4.17, up from HK$3.87 immediately before its suspension, it only regained levels seen last week (see the first chart below). That still left the share price at a 7.3 per cent discount to the buyout price, indicating the market's belief there is a fair chance the proposal will be rejected by aggrieved small investors, many of whom bought PCCW shares at many times their current price.

No, yesterday's rally is significant not because it tells us whether the market thinks today's vote will approve the buyout proposal. It is significant because it indicates the market's confidence that the vote will take place free from any regulatory obstacle despite the alleged manipulation plot.

This should be astonishing. It is hard to believe that regulators in any reputable market would allow a buyout vote to proceed without first getting to the bottom of such a blatant attempt to interfere with the process.

But yesterday's rally demonstrates that the market has no such fears. The vote will go ahead, and its result will stand, even though its credibility must now be tainted: proof once again that where tycoons' interests are involved, regulators are spineless, and that for some it is all too easy to game Hong Kong's market with impunity.

Monday's news that the number of Hong Kong households in negative equity - where their mortgage debt exceeds the market value of their home - rose fourfold over the last three months of last year was no surprise.

With flat prices down 22 per cent from their March 2008 peak at the end of the year, the number of homeowners under water rose to almost 11,000, up from just over 2,500 in September (see the second chart below).

Happily, however, there are tentative signs the property rout may be abating. The Centa-City leading index of flat prices actually climbed 2.8 per cent over the month to January 25, and the number of home sales in January was up almost 50 per cent from November's low.

Although it would be premature to predict any recovery based on January's figures, especially given the distorting effect of the Lunar New Year, there are slim grounds to hope negative equity numbers will not rise much further from December's levels.